Unite, the union representing the drivers, who are aggrieved over their working conditions and safety fears, has said that a strike will not take place until after the long Easter weekend.
There are also growing concerns that the overall picture in the UK is worse than previously hoped. The country has one of the biggest deficits in Europe – 82 percent of gross domestic product in 2011, according to IMF estimates. The government still owns large stakes in Royal Bank of Scotland and Lloyds after the fallout from the credit crisis, and looks unlikely to offload them at a profit any time soon. UK public sector borrowing was almost double forecasts in February as income tax receipts fell.
“On the fiscal side, almost every country in the euro zone has less of a problem than the UK,” Holger Schmieding, chief economist at Berenberg Bank, told CNBC.
Analysts at Barclays cut their forecasts for GDP growth in the UK to just 0.7 percent last week, after weaker-than-expected data for the first three months of 2012.
The UK is distinguished from some of its euro zone neighbors by having a relatively flexible labor market and comparatively low business tax, as well as its own currency , which should help its recovery, according to Schmieding. And inflation has continued to fall in recent months, which may help restore some of consumers’ confidence.Page 2 of 3 | Prev Page | Next Page