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Economy shrank in last quarter of 2012
9:39am Friday 25th January 2013 in News
Britain's recovery slammed into reverse at the end of last year after the economy contracted by a worse-than-expected 0.3%, official figures revealed today.
The fall in gross domestic product between October and December compares with 0.9% growth in the third quarter and will raise fears that the UK is on course for an unprecedented triple-dip recession.
GDP - a broad measure for the total economy - would have to contract again this quarter for the UK to be back in recession, but hopes of a rebound are starting to fade after a snow-hit start to 2013.
The Office for National Statistics said economic output as a whole remained flat in 2012.
The fourth-quarter drop is worse than expected, with most economists forecasting a drop of 0.1%.
It deals a blow to recovery hopes after the UK bounced back from the longest double-dip recession since the 1950s in the third quarter.
But the rebound was largely driven by one-off factors, such as the Olympics, and as the economy clawed back activity lost during the Queen's Diamond Jubilee holiday, which has skewed quarter-on-quarter changes in activity, the ONS said.
The fourth-quarter figures are preliminary estimates and subject to revision.
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