In new figures being released by the ONS the recession is deeper than previously thought due to a weak construction sector. Previously it had been reported that the economy was down by 0.2pc but it has been revised downward even further to 0.3pc for the first quarter of 2012.
Obviously this revision means that the UK economy is 0.1pc weaker than had been previously reported and also that much weaker than the same period in 2011. This is not good news for Mr. Osborne who has unwaveringly defended the austerity programme even though there are a number of obstacles such as the debt crisis in the euro zone and a weak demand for domestic products.
According to the chief economist in the UK this information is, in his words, “very disappointing.” In addition, Howard archer states that even a modest recovery is not probable because of the escalating crisis in Greece.
This is the first double dip recession in the UK since the mid-70s, 1975 to be precise, as the GDP fell to 0.3% for both the last quarter of last year and the first quarter of the current year. All those services rose by 0 .1% industrial production was down by 0.4% and construction down by 4.8% in the first quarter.
These figures are even more discouraging when the current prediction is that the UK will experience a 0.5% contraction on the year taken as a whole, according to the chief UK economist for Capital Economics, Vicky Redwood.
Perhaps this downward revision from the Office for National Statistics will prompt the BoE to release another round of quantitative easing to stimulate the economy. Even so, all eyes are on the UK’s largest trading partner, the eurozone, as the debt crisis deepens there.
