A W-shaped recession is a possibility, Capital Economics has suggested after a survey by the Confederation of British Industry (CBI) revealed that sales dropped recently in the consumer services sector.
The firm’s head economist Vicky Redwood said the findings of the CBI study – carried out in October and November – was “disappointing”, as other studies of the service segment of the economy had “shown evidence of being quite positive”.
She added: “We should see further improvement from here, although we wouldn’t rule out a ‘double dip’ scenario.”
Such a situation could cause more debt management problems for some and for this reason it may be wiser for people to seek solutions now than rely on the economy making a full recovery.
A more positive finding in the CBI survey was that service firms were at their most optimistic since February 2007, with sales, profits and employment levels all expected to improve in the next quarter.