UK remains deep in recession: even the services sector contracted

Wednesday, July 25th 2012 - 19:33 UTC

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Osborne: Britain has ”deep-rooted economic problems”

Britain's economy shrank far more than expected in the second quarter, battered by everything from an extra public holiday to government spending cuts and the neighbouring Euro zone crisis.

Finance minister George Osborne said figures released on Tuesday showed Britain had “deep-rooted economic problems,” adding that the slump in the second quarter was disappointing even when taking into account one-off factors that hurt.

Britain's GDP fell 0.7% compared with the first three months, the sharpest fall since the height of the global financial crisis in early 2009, the Office for National Statistics said.

Output in Britain's service sector (which makes up more than three quarters of GDP) contracted by 0.1% in the second quarter after growing 0.2% in Q1 2012.

Industrial output was 1.3% lower, while construction - which accounts for less than 8 percent of GDP - shrank by 5.2%, its biggest drop since the first quarter of 2009.

The figures confirmed that Britain remains mired in its second recession since the start of the financial crisis, with the economy shrinking for a third consecutive quarter.

But despite the bad news the Olympic Games this month are expected to be a big boost for tourism and trade, benefiting the City of London with over 7 billion dollars.

Categories: Economy, Politics, International.

Tags: 2012 Olympic Games, Eurozone crisis, George Osborne, United Kingdom.

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Yomp to victory
Deep in recession? For the love of God (or wherever other mythical creature appeals) invest in a dictionary.
Jul 25th, 2012 - 08:08 pm 0
windy
Why no coments on this one?. If it were about Argentina all the islanders would be howling with joy. But sadly this is about the UK which had to borrow over £13 billion pounds just last month, and is forcast to borrow over £120 billion for the year. It is one down grade away from seeing the interest it pays on its debts skyrocket . More cuts will follow and the double dip recession they are in could well become a depression. This is not good news for Britain or any country trading with it. But you don't see any Argentines on here cheering and laughing at the uks problems. Perhaps the Argentines are just more mature.
In short people in glass houses should not throw stones.
Jul 25th, 2012 - 08:14 pm 0
Condorito
1 Yomper
Is it “Deep” or “recession” that you are not happy with?
Jul 25th, 2012 - 08:48 pm 0

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