25 January 2013 10:39 [Source: ICIS news]
LONDON (ICIS)--UK GDP contracted in the fourth quarter of 2012, official statistics showed on Friday, indicating that the country may be drifting back into recession.
According to the Office for National Statistics (ONS), UK GDP for the quarter shrank by 0.3% compared with the previous quarter, raising concerns the country may be on the verge of dipping into recession for a third time since the 2008 financial crash. Two periods of consecutive negative growth qualify as a recession.
Industrial production decreased by 1.8% month on month during the quarter, according to the ONS, while the construction sector marked a slight uptick, expanding by 0.3% over the same period.
UK GDP had expanded by 0.9% in the third quarter of 2012, which has been attributed in part to an uplift from the London Olympics, which took place during the summer.
Growth was flat year on year during the quarter, and flat for 2012 as a whole compared with 2011, the ONS added.
However, improving employment figures released this week for the three months to November 2012 are more indicative of the state of the economy than the GDP figures, according to UK business group the British Chamber of Commerce (BCC).
The employment data, also published by the ONS, showed that unemployment decreased by 37,000 and employment increased by 90,000 during the period, compared with the prior three months.
BCC chief economist David Kern said: “Although it is clear that the economy has been stagnant for too long, talk of a “triple-dip” recession is unnecessarily downbeat and damages business confidence across the nation.
“The positive labour market figures provide a better reflection of the true state of the economy,” he added.
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