Economic contraction tipped to slow down

A banking and financial services specialist has insisted that economic conditions in the UK will improve.

Official figures released today showed that the economy contracted by 0.4 per cent during the third quarter of the year, making the current recession the longest on record.

However, Danny Gabay of Fathom Consulting, a former economist at the Bank of England, believes the UK can look forward to better times.

Speaking to BBC News, he said future rates of economic contraction should not be as bad as those seen in recent months.

"It is highly unlikely to be anywhere near as bad as the period around the turn of the year, following the collapse of Lehman Brothers," he commented.

Mr Gabay added that further economic contractions are a "distinct possibility".

Meanwhile, Ian Kernohan of Royal London Asset Management has described the latest economic figures as a "real surprise", as there has recently been lots of "hype" about the recession coming to an end.

Updated: 23 October 2009.
Categories: banking-and-financial-services, finance-and-accounting, market-and-industry-news.