The UK is headed for a triple-dip recession according to the latest statistics released from the UK’s Office for National Statistics (ONS). The UK has now contracted for four of the past five months as the country’s manufacturers suffered their worst 12-month stretch since the financial crisis in 2008.
The UK is one of Ireland’s largest trading partners, accounting for 16% of all export trade.
The grim economic news saw resulted in the pound take a beating in the currency markets, pushing it to a 13-month low against the euro. There is now growing pressure on the Chancellor, George Osborne to tone down his austerity plans in the UK.
Economic difficulties in the UK and a falling pound represent a double threat to the Irish economic recovery as demand for Irish goods and services there could be reduced. UK goods being sold into Ireland also become less expensive as a result of the weaker pound. The UK is Ireland’s largest trading partner, accounting for roughly 40% of all imports into the country.
Output in Britain’s factories fell by 1.5pc in the quarter and by 1.8pc in 2012 — the first annual decline since 2009. The GDP data suggested the Chancellor’s strategy of rebalancing the economy from consumption to manufacturing was failing.
Economists put weakness in the manufacturing industry partly down to the problems in the eurozone, which remains the UK’s main trading partner. Earlier this week, the UK Prime Minister, David Cameron announced plans for a 2018 referendum to take the UK out of the European Union altogether