Figures have today suggested that the economy shrank between the periods of July and September by 0.5% it has been revealed by the Office for National Statistics. This is the first time since 1992 that the economy has reduced in size. If the economy shrinks between October and December the country will officially be in a recession.
The figures also revealed that household spending in the third quarter fell by 0.2% which is the biggest drop since 1995. It appears that people’s money belts are tightening as the effects of the economy are starting to hit home.
The government are trying to revive the economy with plans to reduce VAT and to help those people in most need of support during these difficult times. However, to achieve this the government are lending exceptional amounts of money. Therefore when the economy turns around the government will have to try and recoup this money through increasing taxes and such like. What are your views on this issue?
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