"Festive cheer seems to be in short supply at Capital Economics:
– We don’t have high hopes for 2012. In fact, we continue to think that the UK will re-enter recession. Output could already be contracting and is likely to continue to fall throughout most of next year.
– If any other country will be hit by the eurozone crisis, it is the UK. The chances of net trade offsetting the effects of the fiscal squeeze therefore now look pretty slim.
– And the indirect effects of the euro-zone crisis won’t help the UK’s domestic economy either. Indeed, concerns about UK banks’ exposures to euro-zone debt have already pushed up banks’ wholesale funding costs, a rise which is now starting to feed through into borrowing rates for firms and households..."at http://ftalphaville.ft.com/blog/2011/12/22/812351/2012-the-year-of-the-double-dip/
