Double Dip Danger Has Risen, Bank Boss Warns
10:51pm UK, Wednesday June 30, 2010
The danger that Britain will suffer a double-dip recession has increased in recent months, a boss at one of the world’s biggest banks has told Sky News.
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Antony Jenkins, head of global retail banking at Barclays, told Jeff Randall Live the UK’s recovery remains uncertain as austerity measures and debt worries weigh heavy both at home and overseas.
But even though the outlook had deteriorated, Mr Jenkins thought it more likely than not that Britain would avoid slipping back into recession.
“I would say that the possibility of a double-dip (recession) is probably greater than it was a few months ago – but it’s still not a probability,” he said.
“I think it’s what we are seeing across the global economy… There’s a lot of uncertainty out there and uncertainty makes people nervous.”
His warning came on the day a leaked Treasury report predicted up to 1.3 million UK jobs would be lost by 2015 as Britain undergoes a severe fiscal squeeze.
Mr Jenkins stated Barclays’ business customers, though more optimistic this year than last, were yet to be convinced the upturn would be sustained.
“If they are hiring, they are hiring contractors or temporary employees because they do not want to have that headcount on the books – which means that they are uncertain themselves about the overall direction,” he said.
Consumers, meanwhile, were being “prudent, cautious and rational” in response to the economy’s fragile state.
“For example, we have seen people pay down their mortgage – interest rates have come down for a lot of people and they are using that cash to bring their mortgage down,” he added.
“We’ve seen people bring their borrowing down on credit cards, take out fewer loans, savings are going up.”
Mr Jenkins, whose bank is planning to spend £250m a year expanding its operations in Spain, Portugal and Italy, also backed the eurozone to bounce back from its current troubles.
“There’s a difference between the short-term view – and things are very turbulent in the short-term – and the longer-term, five-to-ten-year, view.
“And we do believe that the Spanish economy and the eurozone economies will get through this difficult time.”
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