Back in recession
Wednesday 25 April 2012 9:29
The UK economy has officially fallen back into recession for the second time since the financial crisis after official data showed a dip in output in the first three months of 2012. The Office for National Statistics said Britain's gross domestic product fell 0.2 percent in the first quarter of 2012 after contracting by 0.3% at the end of 2011, confounding forecasts for 0.1% growth.
Most economists, reports Reuters, had expected Britain's $2.4 trillion economy to eke out modest growth in the early 2012, but these forecasts were upset by the biggest fall in construction output in three years coupled with anaemic service sector growth and a fall in industrial output.
The UK's economy shrank by 7.1% during the 2008-2009 recession and recovery since has remained slow. Today's data showed that output was still 4.3% below its peak in the first quarter of 2008, and the economy has only grown by 0.4% since the government came t o power in the second quarter of 2010.
Output in Britain's service sector - which makes up more than three quarters of GDP - rose by just 0.1 percent in the first quarter after falling 0.1% in Q4 2011, kept down by a fall in output in the large business services and finance sector.
Industrial output was 0.4% lower, while construction - which accounts for less than 8 percent of GDP - contracted by 3.0 percent, the biggest fall since Q1 2009.
Britain's Office for Budget Responsibility forecasts growth of 0.8 percent this year. Wednesday's data shows that first quarter output was no higher than a year earlier.
