The UK economy contracted by 0.3% in the fourth quarter of 2012, official figures confirmed today.
In its second estimate of GDP for the final quarter of the year, the Office for National Statistics (ONS) maintained its previously published figure for the three-month period but revised upwards its estimate for the full year after upgrading estimates for earlier quarters.
Having previously said that there was zero growth in 2012, the ONS now believes that the economy grew by 0.2% over the whole of 2012, compared with the previous year.
The decline in the economy in the fourth quarter followed a third quarter that was boosted significantly by ticket sales for the Olympic and Paralympic Games in London. Maintenance at the UK’s largest North Sea oil field and underlying weak domestic demand also contributed to the end-of-year drop.
Overall, the figures point to continued stagnation in the economy.
John Longworth, director general of the British Chambers of Commerce, commented that the economic picture for the UK remains weak and these latest figures, taken together with the recent downgrade of the UK’s credit rating, confirm that action must be taken quickly to get the economy growing again.
Longworth called on Chancellor George Osborne to be “radical” in his March Budget and introduce “measures that create an environment of enterprise, stimulate export growth, kick-start infrastructure projects and create a structure of business finance which supports growing companies.”
The UK still faces the risk of sliding into its third recession in five years, if output struggles to return to growth in the current quarter. Surveys of activity in January and February paint a mixed picture, but in a poll carried out by Reuters economists said that they foresee the economy growing by 0.2% in the first three months of 2013.