UK In Deeper Recession Than First Thought

24 May 2012 15:00 - Crage Campbell

    



UK In Deeper Recession Than First Thought

The Office for National Statistics has said today that gross domestic product fell by 0.3% in the first quarter of this year and not the 0.2% it previously announced. The main reason for this downward  revision was a bigger contraction in construction output, which is now believed to have fallen by 4.8%, compared with the previous estimate of 3% which is the steepest decline seen for 11 years . The ONS said that the quarterly output of the production industries fell by 0.4%, within which manufacturing output was flat, while the service industries made a positive contribution to growth with output rising by 0.1%. Household spending also slowed and was up 0.1% in the first quarter compared to 0.4% at the end of last year.

According the new figures government spending, driven by health and defence, was up 1.6% , the biggest rise since the first quarter of 2008. The news is a further blow to the coalition government's austerity programme amid signs from the recent G8 and Eurozone summits that the mood over deficit reduction was changing. Shadow business secretary Chuka Umunna said the country was being run by a “no-growth government with its head in the sand.” He said, “They blame business, they blame the people who work in them and now they seek to blame the eurozone, when countries like Germany and France are not in recession and we are,” he told MPs in the Commons. He also said, “We have always known that Tory-led governments are heartless; do today's figures not demonstrate they are not just heartless, they are hopeless too?”

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Related Links :
Office for National Statistics - Second Estimate of GDP, Q1 2012
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