- Tel 01582 766677
- Register - it's free
Preliminary figures show UK in double-dip recession
UK economic growth decreased by 0.2 per cent in the first quarter of 2012, according to preliminary figures from the Office for National Statistics (ONS), pushing Britain back into a technical recession.
A fall in the production industry output and construction output has been blamed for the unexpected contraction, showing a decrease of 0.4 per cent and 3 per cent respectively from the previous quarter. Output in the service sector increased by just 0.1 per cent.
A recession is technically defined as two consecutive quarters of negative growth. In the last quarter of 2011 the economy shrank by 0.3 per cent.
Today's figures are a preliminary estimate based on 40 per cent of the total information used and are subject to a further two revisions in the coming months, meaning the figures could be revised up or down.
The surprise fall in the UK's gross domestic product (GDP) goes against many other closely watched surveys such as the Markit/CIPS survey and a report from the Office for Budget Responsibility (OBR) which Chancellor George Osborne cited in the recent Budget.
The Chancellor said that today's figures came as 'very disappointing news.'
"It's a very tough economic situation and it's taking longer than anyone hoped to recover from the biggest debt crisis of our lifetime," he said.
The ongoing euro crisis, with many European countries either in or heading into recession, the Chancellor said, had exacerbated the situation.
Commenting on the figures, the British Chambers of Commerce (BCC), whose own Quarterly Economic Survey had painted a more optimistic outlook, said that the large falls in the construction sector and the marginal increase in service sector output would be seen as 'too low by most analysts.'
David Kern, chief economist at the BCC, said: "We think it is likely that the preliminary estimate will be revised upwards when more information is available. For the time being, the main priority is to minimise any possible damage to business confidence."
"But it is clear that economic growth in the UK remains much too low."
Talking to the BBC, Graeme Leach, chief economist at the Institute of Directors (IOD) said that the fall in figures were 'relatively small' and that individuals should not be 'too alarmist.'
- About us
- Our services
- Business services
- Personal services
- Specialist sectors
- Financial Services
- Business news
- Budget 2015
- Minimising capital taxes
- Year end tax guide 2014/15
- Autumn Statement 2014
- Financial planning and strategy guide 2015/16
- Tax efficient investments
- Tax planning for business owners
- Tax rates and allowances
- Offshore issues update
- PAYE and NI
- IR35 Centre
- Tax and business calendar
- Budget archive
- Our blog
- Contact us