Stomach-churning gyrations of the stock market in recent weeks, along with some readings explicit economic weakness has led to many private sector economists to downgrade their forecasts for further growth.

But despite the dark spread is understood that Britain will not turn into a recession.

“Our base is not a recession but a longer period of weak growth and rising unemployment,” said Michael Saunders, economist at Citigroup, which began in 2011 with a growth forecast significantly higher than many others in the private sector. Now, Mr. Saunders said that the prospect of increased business investment to create jobs and increase demand – once considered the most likely scenario – had weakened.

While UK companies have ample liquidity and is very profitable, had the blade in the financial markets, coupled with anxiety about how the governments of the euro area will be to manage their finances and banking, confidence shaken, he said. “This will encourage companies to defer expansion and the return to cost-cutting fashion,” he said.

Citi, which has significantly reduced its forecast for 2012 gross domestic product, is not alone. Economists at JP Morgan said that “GDP forecast revisions, while the markets may be turning a bit like trying to catch a falling knife.” But that did not deter cut its own growth forecast for the second half of 2011. Malcolm Barr, economist at the bank, said no one doubts that both economies of the U.S. and British were weaker than had been thought earlier this year just look at the latest data jobs. The UK recorded the largest one month jump in jobless claims since May 2009, when the economy was stuck in recession and the overall unemployment rate rose to 7.9 percent.

UK Recession

Moreover, the rate of GDP growth than expected for the euro area in the second quarter of 2011 has important implications for the UK. As Mr. Barr said, is the single largest trading partner of Britain. This close relationship with continental Europe might explain the results of investigations of private sector companies in the United Kingdom show that confidence is low. Monitor ICAEW / Grant Thornton business confidence, to be published on Monday showed that consumer confidence index fell to 13.7 in the second quarter to 8.1 in the third quarter of this year and is at its lowest level since the third quarter of 2009, when the UK is in recession.

Scott Barnes, CEO of Grant Thornton, said the study findings should come as little surprise. “As companies anticipate growth in sales, exports and profits, is how vulnerable our most important overseas markets, worrying,” said Barnes. “The UK economy will grow this year, albeit slightly, and I think we will avoid double-dip recession. This may be a small consolation, but we must look to the long-term recovery rather than quick fixes. ”

In addition, there are signs that the household sector – which represents almost two thirds of consumption in the UK – are also losing confidence. Markit, which compiles the monthly surveys of purchasing managers in manufacturing and services sectors, is to release the results of the Household Finance Index shows that household finances worsened in August at a faster pace in two years half of study, falling even faster than the do when the recession was at its peak in early 2009.

Significantly, the survey recorded the largest decrease in available cash to spend in a month in the history of the survey. Salaries will increase at an average rate of 2.2 percent annually before the effects of the bonus – and, with the exception of the business and financial services at rates below 2.0 percent – it is not surprising that households are struggling to keep up prices are now up 4.4 percent year on year.

An element of economists cite as a potential engine of growth – and you could help the British stay out of recession – is the possibility that the Bank of England will do more buying gilts, a process known to quantitative easing, despite high inflation.

“Overall, modestly worse than expected inflation in July [photo] should not reduce care to soften the prospects for growth,” said George Buckley, economist at Deutsche Bank. The high current inflation, the bank could do little, it was not the most pressing problem, he said, and believes that growth was likely to prevail.