The latest figures have shown that during the first quarter of 2012, the economy shrank by 0.2 percent, which follows on from the contraction of 0.3 percent during the final quarter of 2011 – which officially is defined as a double-dip recession.
Many economists had expected the UK economy to avoid a double-dip recession, however a three percent fall in construction output – the biggest fall in three years – coupled with slow service sector growth; has caused the economy to struggle.
The Office for Natiaon Statistic's preliminary estimates of GDP are the first released within the European Union, and are based partly on estimated data. On average, they are revised by 0.1 percentage points up or down by the time a second revision is published two months later
However, in further bad news for the Treasury, the Bank of England, have warned that there is a risk of another contraction during the second quarter of 2012, due to an extra public holiday; and unlike the previous two quarters, the Bank of England do not appear keen to provide further monetary stimulus through quantitative easing asset purchases.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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