UK economy slips back into recession

The UK economy, as measured by gross domestic product (GDP), has returned to recession, after shrinking by 0.2% in the first quarter of 2012, according to the preliminary estimates from the Office for National Statistics.

The economy shrank by 0.3% in the final quarter of 2011 and two quarters of contraction is technically a recession. The slump into a double dip recession was largely down to construction output, which was down by 3% in the first quarter on the previous quarter.

The index of production (manufacturing, mining and utilities) was down by 0.4% on the previous quarter, although manufacturing was down by just 0.1%.

However, output in the service industries, which accounts for around three-quarters of the economy, increased by 0.1%.

The figures are open to further revisions, but it is doubtful that any upward revisions will be enough to put the economy into growth in the first quarter.

Len McCluskey, general secretary of the Unite general union, said: “Britain’s return to recession and the government’s disastrous budget is proof that George Osborne is not up to the job.

“The government’s economic credibility is now in tatters because we have a chancellor who is anti-growth and fixated on austerity. If this discredited coalition had a growth strategy, it’s obvious the figures would be better than they are."

www.ons.gov.uk/ons/dcp171778_263578.pdf

www.unitetheunion.org/news__events/latest_news/return_to_recession_and_disast.aspx