The UK economy in 2001.

Although the performance of the economy in 2001 was reasonably satisfactory, there are worrying signs that the economic environment is deteriorating rapidly. The economy has managed to survive one major domestic shock in the form of the foot and mouth crisis without a major downturn. However, the current international situation has far more serious repercussions and may well lead to the first significant recession in the UK for ten years. In particular the downturn of economic activity in the United States is likely to lead to problems throughout the world and, although both the Federal Reserve in the US and the Bank of England in the UK have responded by relaxing monetary policy, this is unlikely to be enough to offset the recessionary forces which have become evident in the second half of the year.