Recession much worse than feared as economy shrinks
BRITAIN’S recession is deeper than feared, figures revealed yesterday.
Economic output – Gross Domestic Product – shrank by 0.4 per cent from last October to December, against the initial estimation of 0.3 per cent.
But the Office for National Statistics said previous calculations that output fell by 0.3 per cent in the first quarter of 2012 was unchanged.
Recession is defined as two or more quarters of declining GDP in a row. The impact of the weak economy was underlined by new figures showing household spending fell 0.1 per cent between January and March. It was predicted to have grown by that amount instead.
The underlying position is a littler bit stronger than the GDP figures would suggest
Government expenditure surged by 1.9 per cent while construction declined by a larger than thought 4.9 per cent – its worst performance since early 2009. Industrial production, including manufacturing, was also revised slightly downwards to a 0.5 per cent decline.
David Tinsley, of the BNP Paribas bank, said: “I don’t think it’s all doom and gloom. The underlying position is a littler bit stronger than the GDP figures would suggest.”