In the second quarter the UK economy has taken a shocking downward turn. Britain has plunged into it worse ever double dip recession, as the economy has shrunk by a huge 0.7 per cent. Official figures released today shows.
According to the Office for National Statistics the economic output had been expected to fall by 0.2 per cent. However it was far more severe between April and June due to the disastrous slump in construction.
Poor Growth Figures
Before today's gross domestic product data was revealed the UK had already been in recession, as this was the third quarter of negative growth. The first quarter it had fallen 0.3 per cent followed by 0.4 per cent.
Five quarters of negative growth were recorded in the last recession 2008-2009, before turning positive again. However the economy has not made up for the ground lost at this time. This is why the current recession is described as double dip.
The fall confirmed today is the largest since the depths of the financial crisis in the first quarter of 2009.
It was caused by falls in certain areas of the economy, though the main cause was construction which decreased by a frightening 5.2 per cent in the quarter. The services sector fell by 0.1 per cent and production industries fell by 1.3 per cent.
The extra bank holiday for the Queens Diamond Jubilee would not have helped the growth data nor would the wettest April to June period on record.
After a slew of negative economic surveys, a fall in GDP had been forecast, but the size of the fall has shocked most economist who had predicted it to be around 0.2 per cent.
Royal Bank of Scotland Ross Walker said: 'Everything's a little bit weaker than expected. The construction fall looks implausible, the scale of it. The main disappointment is the services number. We thought even with the drag from the Jubilee that we would probably just about squeeze some growth out of that sector and it's contracted.
Scotiabank Alan Clarke said: 'This is a disaster for UK growth. It looks like construction has done a lot of the damage. In no uncertain terms disaster and on average for the year it's looking very unlikely that we'll be on the right side of zero growth. More likely we'll be contracting.'
This figure is the first estimate and could be revised in coming months; however it does suggest that the UK is in the longest double dip recession since records began back in 1955. Some believe it is the longest since the Second World War.
In the 1970s we had our last double-dip recession, the economy was choked with soaring oil prices and the miners' strike, though this only lasted two quarters.
Chancellor George Osborne will today get more pressure heaped on him as no doubt people will say his austerity measures are not helping the recovery.
Since the coalition came to power in the second quarter of 2010 the economy is 0.3 per cent smaller.
Mr Osborne said: "We all know the country has deep-rooted economic problems and these disappointing figures confirm that. We're dealing with our debts at home and the debt crisis abroad. We've made progress over the last two years in cutting the deficit by 25 per cent and businesses have created over 800,000 new jobs.
'But given what's happening in the world we need a relentless focus on the economy and recent announcements on infrastructure and lending show that's exactly what we're doing.'