UK Recession Deeper Than Thought
London, June 28 (RHC)-- The UK has fallen deeper into recession than previously thought, confirming that the country has officially entered a double-dip. Data from the Office for National Statistics showed that the economy shrank faster than previously estimated between October and December last year, with a decline of 0.4%.
The economy also contracted for a second quarter between January and March this year, with the unchanged -0.3% estimate confirming that Britain is in recession for the second time in four years.
A drop in construction and industrial output in the first three months of the year outweighed the biggest rise in government spending in almost seven years, dashing Chancellor George Osborne's hopes of a recovery led by the private sector. Construction fell in the UK at its fastest pace in three years, down 4.9%, while industrial output was down by 0.5%.
The London-based Office for National Statistics said the crucial measure of household consumption fell 0.1% after increasing 0.5% in the final quarter of 2011. On an annual basis, it dropped by almost one percent.
Household consumption makes up about 60 percent of the UK's GDP, so a decline in spending has a huge impact on the economy. The household saving ratio fell to 6.4% in the first quarter from 6.9% in the previous quarter, suggesting consumers may have been dipping into their savings for the little spending they have been doing.