Recession: It’s official
By politics.co.uk staff
Britain has officially entered recession for the first time since 1991, figures released today show.
The fall is the biggest since 1980 and was larger than predicted by analysts.
The Office for National Statistics (ONS) said the economy contracted by 1.5 per cent in the fourth quarter, after shrinking by 0.6 per cent in the third quarter.
Speaking on Radio 4’s Today programme, Gordon Brown said: “We are fighting this recession with every weapon at our disposal.
The prime minister also took umbrage at comments from David Cameron that the UK may have to go to the International Monetary Fund as James Callaghan’s Labour government did in 1976.
“I think this is ridiculous behaviour on behalf of opposition parties,” Mr Brown said.
“The situation in Britain is this: that we have low public debt, we have low inflation, wages are under control.”
But the Liberal Democrats also criticised the government. Party leader Nick Clegg said Mr Brown was “living in denial”.
“In blaming everything on the US, Brown is desperately seeking to pull the wool over our eyes and distract attention from his own failure,” he said.
“For a decade he presided over an overheated housing market and a City of London gambling with the nation’s future.
“The government must now urgently clear up the confusion over its bank bail out plans.”
Shadoew chancellor George Osborne said the prime minister needed to take responsibility for the situation.
“With unemployment rising faster than anywhere else, and businesses closing every day, these figures are deeply worrying,” he said.
“The government’s endless announcements and summits are commanding neither public confidence at home nor confidence abroad.
“And it’s difficult to see how we’ll get that confidence with a prime minister who blames everyone else for the mess we’re in and refuses to acknowledge any mistakes.”
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Source: centre for economics and business research
Recession is generally defined as two quarters of successive contractions in GDP, which means the UK has been in recession since July.
GDP fell by 1.8 per cent for the year, which also makes this a ‘full blown’ recession.
SNP Treasury spokesman Stewart Hosie said: “The economic bad news has been relentless, and so confirmation that we are officially in recession is no surprise.
“It is essential that the UK government step-up action to keep this recession as short and shallow as possible.”
The prime minister said people underestimates the determination of the government to do something about the problem.
“Every country is facing these problems and I believe we are doing it with a great deal more determination than a lot of people are giving the credit for,” he said.
Economic indicators pointed toward a sharp contraction in GDP, with all sectors of industry reporting falls in production.
Unemployment has also risen to 1.92 million, while retail figures out later today are expected to show sales on the high street are depressed.
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