Shock figures released by the Office for National Statistics have revealed that the United Kingdom saw a a drop in GDP of 0.5 percent in the last quarter of 2010.
This news has led to a swift decline of both the pound and London shares. It is thought the extreme weather conditions that recently plagued England may have played a part, but it by no means is the only reason. While not serving as the best omen for 2011 it could be an incentive for the Government to relax its planned spending cuts.
However, Finance Minister George Osborne said: “We are very clear that to change our budget plans on the back of these weak figures and the bad weather would be a huge mistake because that would push us back into a financial crisis.”
The news has now left people wondering where any growth in 2011 will come from. Daiwa Capital's Hetal Mehta said: “This is a horrendous figure. An absolute disaster for the economy. We knew that retail sales were heavily affected and that services output would be weak, but the collapse in construction was a major contributor to the downside surprise.”