Ernst & Young think tank says UK probably in recession-BBC

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The 'Item' in Ernst & Young's Item Club stands for "Independent Treasury Economic Model"

1/16/12, "UK in recession says (Ernst & Young) Item Club economic forecasters," BBC

"The UK may have already slipped back into recession, economic forecaster the Item Club has warned.

The think tank said gross domestic product shrank in the final quarter of last year and

• would contract again in the current three-month period.

It said that even if the eurozone could resolve its problems the UK economy would grow

• by just 0.2% this year.

It also predicted unemployment would rise by a further 300,000 to just below three million people.

"We are probably in technical recession," the Item Club's chief economic adviser, Peter Spencer, told the BBC.

"Consumption was very badly hit by rising inflation last year, business spending has been paralysed, and of course recruitment has also gone on hold as a result of the euro crisis.

"And unfortunately, turning to exports, Europe takes the lion's share of our exports."

The Item Club said the economy would not return to normal levels of growth until 2014 as the eurozone crisis continued to hold back investment in the UK.

Even if a solution was found, Britain's economy would still only grow by 1.75% in 2013 and 2.8% in 2014, it said....

The forecaster called on UK exports to find new markets for their products

• and stop relying on European economies.

Meanwhile, the Chartered Institute of Personnel and Development said unemployment would stay above 2.5 million until at least 2016, peaking at 2.9 million next year.

Chief economic adviser John Philpott said the jobless rate would rise to 8.8% at the end of next year."...

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Importance to GDP cited:

12/30/11, "UK issues offshore drilling licences," BBC

"The UK government has awarded 46 new exploratory drilling licences to firms, including Shell and Centrica, looking for oil and gas.

The awards were initially held back due to environmental concerns.

However the government says it is now confident exploring in the regions, including the English Channel, North Sea and West of Shetland, is safe.

Environmental groups have criticised the decision saying the drilling may put marine ecosystems at risk....

However the government says safeguards have been put in place.

"Oil and gas remains crucial to the UK economy - contributing around 2% to the country's GDP," said energy minister Charles Hendry."...

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