UK offically in recession after Q4 GDP decline

23 January 2009 10:24  [Source: ICIS news]

LONDON (ICIS news)--The UK has officially fallen into recession for the first time since the early 1990s, according to government figures released on Friday.

Data show that gross domestic product (GDP) fell 1.5% in the fourth quarter of 2008, after a decline of 0.6% in the third quarter.

Unemployment has accelerated sharply since the start of the banking crisis, with 1.92m now out of work, while the housing market and retail sales have been showing little sign of recovery.

The Bank of England has aggressively cut interest rates since October to a current rate of 1.5% in an attempt to drive down the cost of lending, but banks have been reluctant to revive activity.

The government has forecast a decline in GDP of 0.75-1.25% in 2009, though there have been indications that the figure may be revised.

On Thursday, data showed UK car production in December had almost halved year on year as plants were shut down over Christmas.

The UK, the world’s fifth largest economy, is the latest major economic power to officially announce a recession, following the US, Germany and Japan. The collective 15-member eurozone was declared to be in recession in November after reporting consecutive GDP contractions in the second and third quarters.

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By: Mark Watts
+44 20 8652 3214

< previous article(ICIS Chemical Business podcast November 2, 2009)

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