Will three blows knock UK out?

Updated: 

Knock outGetty

Three massive economic traumas are in the process of dramatically changing life in the UK for the worse.

But will it be enough to drag the economy - and your household - under?

Inflation shock

We are expecting three pieces of terrible news this week about the economy. One will be inflation. This could well hit 5% when news emerges tomorrow. The main culprits are rising petrol prices and household fuel bills, which have sent overall process soaring and left us with less in our pockets at the end of the month.

Given that wages are only increasing by 2% a year at the moment, we are all gradually getting worse off. And life for pensioners on a fixed income is increasingly gloomy.

Retail sales gloom

The second will be high street sales, which are expected to be massively disappointing when overall figures come out on Thursday. Big names have already come out with their sales figures, which are blaming everything from the weather to holidays for their woes, but are essentially revealing that no-one is ready to spend any money on anything beyond the essentials when life is so unpredictable and expensive.

Growth misery

The third will be economic growth. There have been two big reports already this week which say that the UK is essentially not growing any more - and isn't going to for at least 12 months.

The Centre for Economic and Business Research says economic growth this year is only going to muster 0.6% (it originally predicted 1.5% growth for the year but has been endlessly disappointed). It also says growth will be 0.7% next year - which isn't a million miles from stalling.

Meanwhile the Ernst & Young ITEM Club says growth will be 0.9% this year - although it predicts a marginally more optimistic 1.5% for 2012. Both of these figures have been reduced since the last round of predictions.

Peter Spencer, chief economic adviser to the Ernst & Young ITEM Club, said: "It's worse than we thought. The bright spots in our forecast three months ago – business investment and exports – have dimmed to a flicker as uncertainty around Greece and the stability of the eurozone increases."

The future for the UK therefore seems dire. It's a question of whether companies and households can hang on for another year before we see more glimmers of optimism. So what do you think? Will you make it? Will the country come through it?

Let us know in the comments.

SPONSORED FINANCIAL CONTENT