U.K. recession deepens as GDP shrinks
Britain’s recession is worse than previously thought, as revised official figures showed on Thursday that the economy shrank by more than expected in the first quarter of 2012.
“UK gross domestic product (GDP) in volume terms decreased by 0.3 percent in the first quarter of 2012, revised from a previously estimated decline of 0.2 percent,” the Office for National Statistics (ONS) said in a statement.
The British economy has now returned to a technical recession, defined as two successive quarters of contraction, after shrinking by 0.3 percent in the final three months of 2011.
Expectations had been for no change in the first-quarter figure, according to analysts polled by Dow Jones Newswires.
The ONS also revealed a slowdown in household spending, which increased by just 0.1 percent in the first quarter, compared with 0.4-percent growth in the final three months of last year.
Household expenditure in Britain has been hit by high inflation, sluggish wage growth and soaring unemployment.
However, government spending surged by 1.6 percent in the biggest increase since the first quarter of 2008, lifted by spending on health and defence.
On an annual basis, the ONS added that GDP was revised down to show a fall of 0.1 percent. That compared with the previous flat reading and was the first annual drop since the fourth quarter of 2009.