UK back in recession
Britain's economy has fallen back into recession for the first time since 2009 after official figures Wednesday showed that it unexpectedly contracted during the first three months of the year.
The Office for National Statistics said economic output as measured by gross domestic product fell by 0.2 per cent in the first three months of the year from the previous quarter.
The first-quarter drop follows the 0.3 per cent decline recorded in the last quarter of 2011 and means Britain has returned to recession - two consecutive quarters of negative growth are required for a country to be officially deemed to be in recession.
The first-quarter decline was unexpected - the consensus in the markets was that the British economy eked out growth, albeit of a modest 0.1 per cent.
"The government and the Bank of England needed a sharp shock. They just got it," said Marcus Bullus, trading director at MB Capital in London.
Treasury chief George Osborne said the debt crisis afflicting the 17-country Eurozone has impeded Britain's recovery, but he said he would stick to his "credible plan" to cut the country's budget deficit.
A more detailed look at the first-quarter figures showed that a 0.1 per cent in Britain's big services sector was not enough to offset a three per cent in construction and a 0.4 per cent in production industries including manufacturing and energy production.
Britain has experienced a fitful recovery since a deep, 18-month recession ended in the last quarter of 2009 - last year, growth was negative in two of the four quarter.
While the economy is struggling, inflation, at 3.5 per cent, remains stubbornly above the Bank of England's two per cent target, though it has come down from a peak of 5.2 per cent.
And unemployment remains near its highest level since the mid-1990s, even though the rate fell in the three months ending in February to 8.3 per cent from 8.4 per cent.