Double dip recession Cornish 'shockwave' warning
Falling levels of consumer confidence - following the announcement today that Britain has entered its first double-dip downturn since the 1970's - will pile pressure on Cornish businesses, according to a major credit card company.
Gross Domestic Product (GDP), which is used as an indicator of living standards, unexpectedly shrank by 0.2 per cent between January and March, following a 0.3 per cent contraction in the fourth quarter of last year, according to the Office for National Statistics.
These worrying figures will reverberate among businesses and consumers in Cornwall amid falling levels of confidence said Danny Jatania, chairman of prepaid MasterCard provider "Pockit".
He said: "Any expectations of growth have been dashed with this announcement and as a result, businesses looking to boost their performance will suffer a setback.
"There’s no doubt that these figures will affect confidence as many economists were expecting at least a small amount of growth.
"Pressure will now be on businesses to bolster their balance sheets and contribute to a wider effort of returning to positive growth for the British economy."
Although retail sales figures saw a rise last month, a prolonged period of growth is still needed in order to fully recover, Mr Jatania said.
He added: "When consumers in Cornwall hear figures like these, they will be less inclined to increase their spending.
"The pressure will be on the stores to continue offering discounts as households tighten their purse strings but with many stores working to tight margins themselves one has to worry about the sustainability of merely lowering prices.
"Ultimately, stores must engage with customers in more innovative ways and add value to their shopping trips to increase customer loyalty."
The UK economy contracted by 7.1 per cent during the 2008-2009 recession, which lasted five quarters in a row.
Since then recovery has been the weakest in 100 years.