That is according to a new report published today (3 November) by the National Institute for Economic and Social Research (NIESR), which has warned there is a strong chance of the UK slipping back into another period of recession even if continental officials come up with a quick resolution plan.
Indeed, the body indicated that Britain faces a 50 per cent chance of another economic slump if a quick fix is found by policymakers, while this figure increases to 70 per cent if current uncertainty continues.
Jonathan Portes, director of the NIESR, commented: "The impact of the government's tough fiscal policy has been negative. Going forwards, they should loosen policy moderately to help growth."
Earlier this week, it emerged that the UK's gross domestic product expanded by 0.5 per cent throughout the third quarter of 2011.
By Asim Shah