UK ‘on the brink’ of double-dip recession warns Lord Lamont

Lord Norman Lamont said the country has not seen a double-dip recession since 1974-75 in light of recent ONS figures which showed GDP contracted 2.6 per cent in November. The former Conservative MP for Kingston-upon-Thames added that chancellors have “no option” but to sign cheques to keep businesses afloat amid Coronavirus measures. Lord Lamont also revealed the government can do little to “create demand” for industries like hospitality when they are shut down. 

Lord Lamont said: ”When you come out of two-quarters contraction after a period of growth, we’ve had six months of growth, and what’s happened is we’ve gone back into recession or will go back into recession looks like this last quarter will be negative.

“As the figures indicated this morning we are on the brink of going into a double-dip recession which is something we haven’t had in this country since 1974/1975.”

Lord Lamont continued: “I will guess that because of the restrictions we will see negative growth in the first quarter of next year as well. 

“But when the restrictions are finally lifted, don’t forget it is the restriction, it is the lockdown that causes the recession. 

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Lord Lamont continued: “I will guess that because of the restrictions we will see negative growth in the first quarter of next year as well. 

“But when the restrictions are finally lifted, don’t forget it is the restriction, it is the lockdown that causes the recession. 

“There is only a limited amount the government can do. We can’t create demand when you’re in a situation of lockdown there’s nothing you can do to help restaurants or the hospitality industry when it’s shut down.”

TalkRadio host Mark Dolan responded by asking about government borrowing.

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He said: “We have borrowed upwards to £200billion to protect jobs through the furlough scheme and huge financial support for the economy via borrowing.

“However, the borrowing is here to stay, isn’t it? 

“Even under a Conservative Government, given the fact that going into the second half of the year and into 2022 we will probably have to continue to borrow to stimulate growth.” 

Lamont responded: “I don’t know if we will have to borrow to stimulate growth but we will have to borrow.

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“There is a going to be a certain amount of one-off borrowing the chancellor has no option but just to sign the cheques in order to keep business in existence. 

“There are huge one-off costs of this unprecedented recession caused by the pandemic. 

Public sector net debt rose by £301.6billion in the first eight months of the financial year to reach £2,099.8billion at the end of November 2020, £303billion more than in November 2019.

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