Recession even worse than expected
By politics.co.uk staff
The economy has shrunk even more than analysts expected in the first quarter of the year.
Experts were expecting today’s gross domestic product (GDP) figures to be roughly equivalent to the final quarter of last year – showing a contraction of 1.6 per cent.
But data came in showing a 1.9 per cent shrinkage, indicating a more precipitous fall in economic performance.
There has also been a 56.6 per cent drop in production.
The figures represent a deepening of recession and the economy is expected to shrink this year at its fastest pace since the second world war.
In the Budget this week, the chancellor Alistair Darling predicted growth to return by the end of the year – a claim dismissed by many independent analysts.
The Treasury forecasts for the economy are for 3.5 per cent contraction for this year, with 2010 to see growth of 1.25 per cent.
The IMF predicts the UK economy will shrink by 4.1 per cent in 2009 and by 0.4 per cent in 2010.
