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Business Investment in U.K. Plunges in Fourth Quarter


Friday, March 26th, 2010

Investment in U.K. business took a plunge in the fourth quarter, dropping to its lowest level in close to a decade.

What this says of course is the outlook for the British economy is considered good by businesses, and the recession is far from over. The continual spin that the recession is behind is being believed by less and less people, as the data and numbers contradict a lot of the official releases.

For the last three months of 2009 investment stood at $40.45 billion, the worst numbers since the first quarter of 2000, according to the Office for National Statistics.

The quarterly drop in investment was down 24 percent from last year at the same time and 4.3 percent lower than the quarter before.

People continual respond to realities like this by saying the strength of the recovery may not be as strong as is being said it is. I would say there's a question whether there's a recovery at all. And using language that assumes a recovery is premature and manipulative.

There wasn't any one sector hit harder than another, as investment in manufacturing, construction and nonmanufacturing businesses all fell in a big way, with manufacturing investment at its worst levels since 1994, only generating £2.4 billion. Construction only received £438 million, the worst since 1998.

I find it incredible after seeing these numbers that the government will continue to assert Britain and other countries are in a recovery. I don't think we're even close to the recession being over yet, and honest data will continue to confirm that.

The British government has said the economy will grow between 1.0 to 1.5 percent in 2010, and increase to 3.0 to 3.5 percent in 2011. They seem to be the only ones that believe that.



Article by Gary B

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: british business , british business investment