By Gerald Heneghan
Britain’s economy shrank by 0.3 per cent during the last three months of 2012, re-igniting fears over a potential slide back into recession.
The Office for National Statistics (ONS) today (January 25th) released statistics that painted a largely grim picture of the UK’s gross domestic product (GDP) and industrial output.
Production industries saw an output decrease of 1.8 per cent during 2012’s fourth quarter, while this figure remained flat for service industries.
However, the trend was bucked in the construction sector, which experienced slight growth of 0.3 per cent, following two consecutive decreases in previous quarters.
GDP is one of the key indicators of economic growth and is estimated to have been flat between 2011 and 2012.
The release of the figures comes shortly after Olivier Blanchard, chief economist for the International Monetary Fund (IMF), called on chancellor George Osborne to consider cutting back on austerity measures in his March budget.
Speaking on BBC Radio 4’s Today programme, he said: “We said that if things look bad at the beginning of 2013 – which they do – then there should be a reassessment of fiscal policy. We still believe that. We’ve never been passionate about austerity.”
Shadow chancellor Ed Balls was also critical of the government’s economic policies and urged the coalition to heed the IMF’s advice.
“The longer the Government clings on to its failing plan, the more long-term damage they will do to our economy. David Cameron and George Osborne must now put political pride aside and put the national economic interest first,” he said.
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