There was a fall of 0.2 percent in the British GDP for the last quarter, following on the heels of a fall of 0.3 percent in the previous quarter. The Ernest and Young Item Club gets the kudos - Britain is technically in a recession, even if ever so slightly.
It's like cutting 30 pence for every £100 earned, and wish it were so straightforward. If everybody had just been given a wage reduction of such a figure, maybe things would have been alright, and we wouldn't have been in a recession after all.
As Europe goes for growth, with plans being outlined by European President Manuel Jose Barroso, it may be an opportunity for Britain also to make some adjustments to the budget defiicit cuts. As Mme Christine Lagarde suggested a few months back, a slightly gentler pace of reductions may work out.
Before the election in April-May of 2010, Mr Osborne if I remember correctly was suggesting they would cut about £6 billion in a year. That was a figure people dreaded but accepted grudgingly, but now the cuts are of such magnitude that they are having a contrary effect on the whole economy. Instead of somebody earning £1500 a month, the person loses his or her job and ends up claiming Housing, Income Support, and other benefits, probably costing the state more than £1500 a month. That must be something to look into, so that closure of jobs does not actually end up costing the state more.
If corrective measures are taken now, with creation of jobs and empowerment of entrepreneurs by way of small loans guaranteed by the government or some such measures, Britain may look after next quarter and say "Recession? What recession?"