Double-dip may be short-lived

Posted: 6th June 2012

ICAEWAccording to the Institute of Chartered Accountants in England and Wales (ICAEW), the present ‘double-dip’ recession may be short-lived as business confidence appears to be improving.
However, in its latest Economic Insight Report the ICAEW also warns that, with key indicators still below pre-2008 levels, continuing Eurozone difficulties (the unemployment rate in Spain is nearly 25 per cent) and stubborn sovereign debt problems throughout the Western economies, the return to economic ‘normality’ may be a long way off.
The report shows that 44 per cent of businesses are ‘more optimistic’ than they were last quarter on the back of improvements in gross profitability for many firms.
One of the big blocks to economic growth is the low levels of mortgage approvals, leading to low housing demand: house prices fell by 0.6 per cent in the year to April and are some 20 per cent below peak levels.