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Today its official. The UK economy is officially in recession. Confirmation of this widely known fact came today (23rd Jan) from the Office for National Statistics whose figures showed that the economy has shrunk by 1.5% in the final quarter of 2008.

This latest fall has followed a previous fall of 0.6% in the third quarter of 2008. This is the most significant fall since 1980 and exceeds the predicted fall of 1.2%. Sterling continued to fall in value, losing another 3 cents against the dollar. The exchange rate was only $1.357 to the pound at 09:30 this morning (23rd Jan).

Many economists are saying that this drastic fall in GDP is staggering. Some are saying that complete financial meltdown has been averted but there is an expectation that this latest recession will be deeper than that experienced in the early 1980s.

The current economic crisis started with the 2007 US housing market debacle. Almost every sector of the UK economy is now adversely affected. There is no more debate as to whether the UK will enter a recession. Discussion is now focussed on how deep the recession will be and how long it will last.

Early predictions suggested that the recession would match that experienced in the 1990s but new estimates are saying that this latest recession will be equally as bad as that experienced in the 1980s and likely to be a lot worse. The big difference between then and now is that this economic crisis is worldwide. There is no market sector that remains unaffected.

It is anticipated that the recession will push unemployment to levels that have not been seen for decades. Falling demand for products and services is already resulting in many employers having to lay off employees, many of whom would have considered their jobs to be safe.

If you’re travelling anywhere you will be acutely aware of the current lousy exchange rate. When flying from Gatwick or Luton be sure to book your Gatwick Parking or Luton Airport Parking in advance and you will make some great savings.

Technorati Tags: economy, financial crisis, gdp, growth, recession, uk, world economy