Recession worse than expected, gloomy new figures show

June 28, 2012
By

The recession has been deeper than previously thought, official data out today show, with the economy now known to have shrank by 0.4% during the final three months of 2011.

Today’s figures, from the Office for National Statistics, also confirm that UK was firmly in recession for the first quarter of this year, with the economy contracting by 0.3%.

The UK is now in its second recession since the 2007/08 financial crisis, with public spending cuts biting at the same time as the crisis in the Eurozone hits exports.

A sharp fall in the construction sector was one of the main causes for the downward revision, experts said.

Bank of England Governor Mervyn King said this week that Britain risks a downward spiral as a lack of confidence delays business investment.

The Bank looks set to inject more stimulus into the economy as early as next week, with most economists expecting it to restart its quantitative easing gilt-buying programme with a cash boost of £50bn.

 

 

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