26 Apr 2012

British economy back in recession

7:41 am on 26 April 2012

The British economy has returned to recession for a second time since the financial crisis, against the expectations of many economists.

Britain's gross domestic product (GDP) shrank 0.2% in the first three months of this year, the Office for National Statistics said.

A recession is defined as two consecutive quarters of contraction. The economy registered a 0.3% fall in output in the fourth quarter of 2011.

A sharp fall in construction output was behind the surprise contraction, the ONS said.

It is the first time since the 1970s that the British economy has returned to recession after a brief recovery.

Wednesday's figure is an early estimate and is subject to at least two further revisions in the coming months, the BBC reports

Britain's economy contracted 7.1% during its 2008-2009 recession and has recovered less than half this lost output due to the euro zone debt crisis, public spending cuts, high inflation and a damaged banking sector.