The Office for National Statistics has just announced that the UK economy has returned to recession, which is defined as two consecutive quarters of contraction. The 0.2% decline in the first quarter of 2012 follows the 0.3% dip in the final quarter of 2011.
A sharp fall in construction output, largely due to the fall in public sector investment, was behind the latest figure which has surprised many of the leading UK economists.
It was only recently that the British Chambers of Commerce were signalling signs from UK businesses that a ‘double dip’ recession was likely to be avoided. Indeed, David Kern, chief economist at the British Chambers of Commerce, now says that, “These figures are at odds with the experiences of many UK businesses, which continue to operate with guarded optimism.” He added that he expected the preliminary estimate to be revised upwards when more information became available.
For the full analysis of the UK economy please go to the Office of National Statistics.