British GDP fell in fourth quarter

[Hannah Bell]

News that UK Gross Domestic Product (GDP) fell by 0.5 percent in the fourth quarter of 2010 sent sterling and share prices falling on Tuesday.

The figures, released by the Office for National Statistics (ONS), came as a shock because economists had forecast growth of between 0.2 percent and 0.6 percent. Of particular concern was that much of the decline came in co nstruction, which slumped 3.3 percent in comparison to the third quarter, while services declined by 0.5 percent. Over the last year, construction has accounted for more than a third of the growth in GDP.

The statistics raised fears that the economy was on the verge of sliding back into recession, under conditions in which the coalition government’s plan to cut £111 billion from public spending over the next four years will tip it over altogether.

http://www.wsws.org/articles/2011/jan2011/ukec-j27.shtml