A double dip recession is possible, but would be brief, it has been argued.
Head of macroeconomics at PricewaterhouseCoopers John Hawksworth said that the end of the current contraction could emerge in the final months of 2009 as private sector firms increase their stocks.
However, he noted, the pressure on public finances and the rise in VAT back to 17.5 per cent could put the economy back into a decline early next year.
Mr Hawksworth suggested this could be a “temporary dip, followed, perhaps, by a more gradual recovery” over a long period of time.
Such a situation could help
The public sector is much more likely to see increasing redundancies than the private sector in the coming months, according to a survey out this week from the Chartered Institute of Personnel and Development.