Longest double-dip recession in 50 years as UK economy shrinks by 0.7%
BRITAIN slumped to its longest double-dip recession in more than 50 years today after shock figures revealed the economy shrank by a worse-than-expected 0.7 per cent between April and June.
• GDP fall of 0.7 per cent much worse than expected
• Diamond Jubilee and weather contributed to slump
• George Osborne insists ‘we’re dealing with debit crisis’
Gross domestic product (GDP) - a broad measure for the economy - fell for the third quarter in a row and by much more than the 0.2 per cent expected by forecasters, according to the Office for National Statistics (ONS).
The dire performance, which represented the biggest quarterly fall since the depths of the financial crisis in the first quarter of 2009, was hindered by an extra bank holiday for the Queen’s Diamond Jubilee and the wettest April to June period on record.
The figure is the ONS’s first estimate and may be revised in coming months, but it suggests the UK is mired in the longest double-dip recession since quarterly records began in 1955 and it is believed to be the longest since the Second World War.
The last double-dip recession was in the 1970s, when the economy was hamstrung amid soaring oil prices and a miners’ strike, but that only lasted two quarters.
Today’s grim economic reading will heap more pressure on the Government and fuel criticism that Chancellor George Osborne’s austerity measures are choking off the recovery.
The UK’s economy is 0.3 per cent smaller than when the coalition came to power in the second quarter of 2010, the ONS figures showed.
However, the statistics body said the Diamond Jubilee celebrations and the weather played a significant part in the latest slump, although it said it was too early to put a figure on its impact.
Mr Osborne said: “We all know the country has deep-rooted economic problems and these disappointing figures confirm that.
“We’re dealing with our debts at home and the debt crisis abroad. We’ve made progress over the last two years in cutting the deficit by 25% and businesses have created over 800,000 new jobs.
“But given what’s happening in the world we need a relentless focus on the economy and recent announcements on infrastructure and lending show that’s exactly what we’re doing.”
The pound fell against the euro as the data increased chances that the Bank of England will pump more emergency money into the economy or drop interest rates further.
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Thursday 23 May 2013
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