Tuesday, 25 January 2011

Economy shrinks 0.5%, latest figures reveal

GDP slumps for first time in more than a year
UK gross domestic product (GDP) decreased by 0.5% in the fourth quarter of 2010, fuelling fears of a double dip recession.
The Office for National Statistics (ONS) estimates for October to December 2010 compared with an increase of 0.7% in the previous quarter.
The ONS attributed last quarter's economic decline on the bad weather in December.

It is the first time the economy has shrunk since the third quarter of 2009 - driven by construction, which slumped 3.3% compared with a 3.9% increase in the previous quarter, and services, which shrank 0.5% compared with a rise of 0.5% in the previous quarter.

"These are obviously disappointing numbers, but the ONS has made it very clear that the fall in GDP was driven by the terrible weather in December," Chancellor George Osborne said in a statement on the BBC.
He said the government would not consider changing its austerity programme.
"There is no question of changing a fiscal plan that has established international credibility on the back of one very cold month. That would plunge Britain back into a financial crisis. We will not be blown off course by bad weather," he added.