Official: Britain staggers into double-dip recession doom
Programmers, telly producers lose brave battle to save Blighty's economy
Britain has slipped back into recession, preliminary figures released by the Office of National Statistics showed this morning.
The UK economy shrank by 0.2 per cent in the first quarter of 2012. That's the second consecutive GDP nosedive, which technically means fears of the country falling into a double-dip recession have now become a reality.
In the final quarter of 2011, Blighty's economy contracted by 0.3 per cent.
The ONS, which could revise the Q1 figures at least two times over the next few months, blamed - among other things - a sharp fall in the construction industry. It said:
UK real GDP fell by 0.2 per cent between the final quarter of 2011 and the first quarter of 2012, the second successive quarter of contraction.
Over the past year the economy has therefore not grown at all, and total output is now 0.2 per cent lower than it was six quarters ago, in the third quarter of 2010.
While GDP fell by 7.1 per cent from peak to trough during the recession in 2008 and 2009, it has subsequently recovered less than half that loss, and output is still 4.3 per cent below its pre-recession peak.
The ONS added that the "stuttering nature" of economic growth following the last recession in 2009 "means that the economy is weaker relative to its pre-recession peak than at the corresponding stage of the depression in the early 1930s".
Even more chillingly, GDP is in a much sorrier state than where it stood during the recessions of the 1980s and the 1990s, the ONS warned.
One bright note in the gloomy figures was for the transport, storage and communication sector to have recorded an uptick in production to 0.4 per cent during the first quarter of this year, after a 0.5 per cent decrease during Q4 2011.
"Computer programming, consultancy and related activities and motion picture, video and television programme production made the largest contributions to the increase," the ONS said.
Chancellor George Osborne, who unveiled his budget to Parliament last month, said at the time that he hoped to see UK growth rise to 2 per cent next year and to 2.7 per cent by 2014. ®
it could be worse
We could be in a drought with flood warnings........
I have two jobs, both companies are not only actually making profits, but are generally growing and doing well. Yet they are cutting staff and costs as if they were in trouble, cutting wages where they can (and freezing pay where they can't).
I'm not an expert, I know there are many factors to this, but when companies are making a profit and are sitting on the money, and as far as I can see, using recession as an excuse to brutally cut costs and profit in the short term, what do we expect?
Unemployed people (and people with frozen wages) don't have much spare cash, therefore don't spend much, therefore these businesses are collectively starving their source of income in favour of grabbing short term profits. It's not sustainable and it needs to stop.
Re: It was obvious
I fail to understand how an economy that is behaving plus or minus 1% from the previous year is "fucked". This is all down to ridiculous expectations of a 5%+ growth a year every year, which is clearly a pipe dream unless you're so far behind to begin with that even a tiny absolute increase is a huge percentage increase (see Brazil, India, China...)
The reality is that the economy in the last 20 years in western nations has been artificially inflated by using cheap labour in other countries and built on debt that wasn't backed up by real value. -0.5% overall is nothing, you want to see a really fucked economy, look at Spain or Greece, not to mention Egypt.