UK back in recession
The UK is in a technical recession after GDP fell by 0.2% in the first quarter of 2012, according to figures from the Office for National Statistics.
After a 0.3% retraction in the last quarter of 2011, the figures today show the UK is in a double-dip recession. The contraction is within the ONS' margin for error which is 0.2%.
At Prime Ministers' Questions today, the Prime Minister admitted: "These are very, very disappointing figures. I don’t seek to excuse them or explain them away."
He added: “There is no complacency at all in this Government with dealing with a tough situation that has got tougher. It is very difficult recovering from the deepest recession in deepest memory. Our banks had too much debt, our households had too much debt. We have to rebalance our economy. This is painstaking work but we will stick with our plans and do everything we can do boost growth, competitiveness and jobs."
Ed Miliband had described the UK’s fall back into recession as “catastrophic".
Earlier today, George Osborne admitted the economic situation was tough, but emphasised the impact of the eurozone’s troubles on the British economy.
“It’s a very tough economic situation. It’s taking longer than anyone hoped to recover from the biggest debt crisis of our lifetime – even after the recent fall in unemployment. But over many years this country built up massive debts, which we are having to pay off. It’s made much harder when so much of the rest of Europe is in recession or heading into it. 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.“
The figures also show that construction fell 3% in the same period, while the services sector grew by only 0.1%.
New research from the Resolution Foundation has found that 36% of low-income households and 30% of those on middle incomes think their financial situation will get worse in the next year.
Read PoliticsHome's liveblog of the reaction to the GDP figures, as well as coverage of the Leveson Inquiry here