The British economy has fallen back into recession for the second time since the financial collapse of 2008. The news came after a poor report by the Office of National Statistics that showed the economy of Britain shrank by 0.2 per cent in the first quarter of 2012. That followed an earlier contraction of 0.3 per cent in the last quarter of 2011. It is the first “double-dip” recession for the country since the 1970s, the New York Times reports
The poor results contradict forecasts of modest growth made by many economists. The main reason for the disappointment, the newspaper reports, was the biggest fall in construction output in three years, a decline in industrial output and stagnant activity in the services sector, according to the Financial Post.
The numbers are bad news for the country’s coalition government, which has been pushing a controversial austerity agenda. The opposition Labour Party has been arguing that more economic stimulus is needed to revitalize growth. But as the Guardian reports, finance minister George Osborne says the government will stick to its deficit reduction plan.
“It’s a very tough economic situation,” he was quoted as saying. “It’s taking longer than anyone hoped to recover from the biggest debt crisis of our lifetime. The one thing that would make the situation even worse would be to abandon our credible plan and deliberately add more borrowing and even more debt.”