ONS: Growth forecast for Blighty worse than expected
Stats-crunchers revise down final 2011 quarter numbers. Ouch
A week after the Chancellor of the Exchequer delivered his Budget statement to Parliament, the Office for National Statistics has confirmed that the British economy shrank more than expected in the last quarter of 2011.
The ONS published official data today that showed that the limping services sector dragged the economy down further than expected for the three months ended 31 December.
It said that the UK economy fell by 0.3 per cent during the last quarter of 2011, pushing the annual rate of growth to just 0.5 per cent.
The ONS revised down its GDP growth estimate for last year to 0.7 per cent from a previous forecast of 0.8 per cent.
"By any standards, the level of economic activity has been weak during 2011 with real GDP in the final quarter of 2011 broadly unchanged from its level five quarters earlier (in the third quarter of 2010)," it noted.
The ONS added: "Preliminary indicators for the start of 2012 show that trade performance remained solid in January but retail sales weakened in February. Consumer price inflation continued to edge down slowly in February."
It said that the communication industry, along with transport, biz services and the financial sector all contributed to the ONS having to revise down its growth predictions for Blighty.
More chillingly, the ONS said that "domestic demand fell in real terms in 2011 by 0.8 per cent, mainly due to a 1.2 per cent fall in household final consumption".
That figure means that the decline in disposable incomes last year was the biggest drop since 1977.
Osborne told Parliament last week that he was hoping to see UK growth rise to 2 per cent next year and to 2.7 per cent by 2014. ®