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UK plunges further into recession


Mistyrayn

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UK plunges further into recession

UK news World news Further grim news is due with official estimates set to show a further sharp fall in UK output in the first three months of this year.

The 1.9 per cent contraction follows a 1.6 per cent slump in the last three months of 2008 - the first time two successive quarters have contracted more than 1 per cent since records began in 1948.

The estimated fall in quarter-on-quarter output is the largest decrease since 1979, according to the Office of National Statistics (ONS).

The figures come just two days after Chancellor Alistair Darling indicated a 1.6 per cent slump in the quarter by saying the contraction would be similar to the previous period in his Budget speech.

He also predicted the economy would shrink by 3.5 per cent this year - more than double his previous forecast.

The ONS figures come as huge declines in output for many key sectors of the economy have been announced.

The contraction was boosted by a decline for the service sector, which fell 1.2 per cent from a drop of 0.8 per cent in the previous quarter.

Services, which account for 75 per cent of the UK's economy, were pushed lower by a significant drop in business services.

The ONS said these figures were an early estimate for the industry.

Vicky Redwood, UK economist at Capital Economics, said the provisional figures suggest that the recession has been even deeper than previously thought.

She added: 'It's early days yet, but the drop opens up the possibility of GDP in 2009 as a whole falling by even more than the 4 per cent we currently expect. It also deals an instant blow to the Chancellor's forecast of a 3.5 per cent drop in GDP this year.

'For that to be achieved, GDP would have to be broadly flat from Q2 onwards - yet the surveys are already pointing to another fall of 1 per cent or so in Q2.'

how about just sack the over paid / under worked / fiddling politictions...

might not help but i bet it would make us feel better....

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