UK Economy Shrank in Q4 More Than Estimated

The Office for National Statistics released its third estimate for the UK’s gross domestic product.

The UK economy shrank by 0.4 percent in the final quarter of 2011, previous estimates showed that the economy shrank by 0.3 percent. The estimate for the first quarter of this year remained unchanged with a contraction of 0.3 percent. Construction output fell by 4.9 percent, its sharpest fall since the first quarter of 2009, and household spending fell by 0.1 percent, compared with a previous estimate of 0.1 percent growth. These estimates show that the recession has been deeper than previously thought.

Data also released on Thursday showed that government spending grew between January and March at its fastest rate in nearly seven years, further indicating the weak state of the UK’s economy.

Some economists said they expected the Bank of England to restart next week, its programme of quantitative easing, designed to boost growth by injecting money into the economy.

Source: BBC

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.