UK slides back into recession : First double-dip recession since the 1970s!

Reuters

Britain's economy is in its second recession since the financial crisis, data showed on Wednesday, heaping pressure on Prime Minister David Cameron's coalition government as it battles a series of political embarrassments.

The unexpected contraction in the first three months of 2012 - a 0.2 percent dip in gross domestic product - confounded forecasts for 0.1 percent growth.

It came as Britain's Conservative-Liberal Democrat coalition has seen its support slide in opinion polls following weeks of fierce criticism for unpopular tax measures in last month's budget. Local elections, a big test, are on May 3.

The government is also under fire over revelations about its close relationship with media tycoon Rupert Murdoch.

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 percent at the end of 2011.

Most economists had expected Britain's economy to eke out modest growth in 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.

Britain in double-dip recession as growth falls 0.2pc

Britain has been pushed into its first double-dip recession since the 1970s, after a sharp fall in construction output saw the economy contract by 0.2pc in the first three months of the year.

The contraction was driven by a 3pc fall in construction output, while Britain's services sector, which drives 75pc of the economy, grew by just 0.1pc over the period, according to the Office for National Statistics (ONS).

Most economists had predicted growth of 0.1pc, following a 0.3pc contraction in the final three months of 2011.

The shock fall in output is a blow for Chancellor George Osborne, who has come under intense pressure over his austerity drive.

In a statement, Mr Osborne said: "It's a very tough economic situation. It's taking longer than anyone hoped to recover from the biggest debt crisis of our lifetime.

"The one thing that would make the situation even worse would be to abandon our credible plan and deliberately add more borrowing and even more debt."

The figures also fly in the face of several closely-watched surveys that suggested that the UK had narrowly avoided a double-dip.

Defying expectations and surveys, Britain is back in recession, the first double-dip recession since the 1970s. I think there is some light of hope in that the contraction in the first quarter of 2012 was an improvement from the contraction in the last quarter of 2011. But, that's about the only good I can see because how Britain is going to return to growth in world economy that is slowing and the Eurozone in its own slump makes for a rather dire forward looking view. I find it interesting how this outcome came as such a surprise to economists and analysts. Readers of ATS should not be surprised as this is an issue we discuss here frequently with alternate news sources and assessments by those who might know better.

"The one thing that would make the situation even worse would be to abandon our credible plan and deliberately add more borrowing and even more debt."

Hahahaha, what about that foreign aid they insisted on giving to india despite india saying they dont want it?
What about the billions sent to the IMF to help bail out europe?
What about the round of quatitative easing that was reported a few months ago?
What about all the weapons being shipped into libya?

I dont think the uk actually came out of recession, for a start my home town was reported to have over 25% of 16-24 year olds who are NEET (not in employment, education or training).
Oh look the FTSE is positive, rally on!

already postedsearch is ur buddy

reply to post by eyeinoz

it doesn't matter it's in a different forum

Europe Back in Recession ... Are We Next??
Pretty good blog on this ... Everyone should take note.
What happens in one part of the world quickly spreads ..