The latest figures from the Office for National Statistics show that the UK’s economy shrank in the first three months of the year by 0.2%. This on top of the last three months of 2011 showing a drop of 0.3% means that the UK is in a technical recession.
[adsenseyu1]As the previous period of recession is quite recent the UK is also in a ‘double dip’ recession, the first since the 1970s – very bad news for the government and the current occupier of No11 Downing Street, George Osborne.
There was however a slight increase in the services industry output by 0.1% but this was more than offset by production industries and construction sector outputs falling by 0.4% and 3% respectively. The particularly high fall in construction output was the biggest for three years and the service sector results were disappointing by many commentators’ measures.
The dip in this first quarter of 2012 may also have been a little more had the public not rushed to fill their tanks with petrol so boosting retail sales after government ministers hinted that this was a good thing to do in the face of a possible fuel tanker drivers’ strike.
Many people would say that we have never really left recession and any positive GDP figures since the credit crunch (if not before) were more down to personal and government debt holding the whole economy up than any true economic activity in the country.
This will pile pressure on the coalition government, which is pushing forward with austerity to drive down the deficit. But Labour says that these latest ONS figures show that the government’s plans of ‘cutting too deep too fast’ are just not working.