Economy News
Posted: May 24, 2012
The UK economy shrank by 0.3% in the first three months of the year, more than previously thought, revised figures have shown.
Last month’s initial estimate from the Office for National Statistics (ONS) showed a contraction of 0.2%.
The downward revision was due to a bigger contraction in construction output than previously estimated.
Over the last year and a half, the economy has fluctuated between quarters of growth and contraction.
In the final three months of last year, the economy also shrank by 0.3%, meaning the UK is back in recession.
There are concerns that the UK economy will shrink again in the second quarter of the year – the governor of the Bank of the England Mervyn King has warned that the Queen’s Diamond Jubilee could reduce output.
Following the revised figures, shadow chancellor Ed Balls described Prime Minister David Cameron and Chancellor George Osborne as “complacent and out of touch”.
“It’s now clear that this is a recession made in Downing Street by this government’s failed policies,” he said.
“Despite all the problems in the euro area, France, Germany and the eurozone as a whole have so far avoided recession and only exports to other countries stopped us going into recession a year ago. The result is that Britain is now in a weaker position if things get worse in the eurozone in the coming months.”
Government spending
The revised figures for the first quarter showed that output in the construction industry fell by 4.8% compared with the initial estimate of 3%.
