The UK economy could be heading for a double dip recession, according to the publication of recent bleak economic indicators, though to be a response to the cost cutting measures put in place by the British government in an attempt to reduce the national structural deficit.

A survey of the Chartered Institute of Purchasing and Supply, which measures business confidence across core economic sectors, reported a fall in its CIPS services index by almost 2 points in August, reflecting a continued bleak outlook amongst service based businesses as rising unemployment compounds fears of a staggered recovery.

The CIPS construction index showed a similarly bleak picture, losing almost 2 points on its index over the last month off the back of dwindling demand and a shortage of public sector capital projects.

With the extensive public sector cuts and a rollback of government infrastructural projects, growth strategy is focused on private sector expansion, to mop up the additional unemployment left by public sector redundancies.

While the new UK government has fallen subject to extensive criticism, particularly from the traditional left, over its decision to reduce economic dependency on the state and to cut the extent of national borrowing over time, economists are now forecasting that while the immediate future might see stinted growth, the long-term effects of current economic policy is to build a leaner, more efficient foundation for growth and recovery.