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| UK economy 'weakest in 30 years' | UK economy 'weakest in 30 years' |
| (20 minutes later) | |
| The UK economy shrank 1.9% in the first three months of 2009, according to gross domestic product (GDP) data from the Office for National Statistics. | The UK economy shrank 1.9% in the first three months of 2009, according to gross domestic product (GDP) data from the Office for National Statistics. |
| The contraction was much worse than had been expected and was the biggest three-month decline in GDP since the third quarter of 1979. | The contraction was much worse than had been expected and was the biggest three-month decline in GDP since the third quarter of 1979. |
| "It's the weakest in 30 years - that's extremely soft," said George Buckley at Deutsche Bank. | "It's the weakest in 30 years - that's extremely soft," said George Buckley at Deutsche Bank. |
| GDP measures the value of all the goods and services produced by a country. | GDP measures the value of all the goods and services produced by a country. |
| A decline of about 1.5% had been expected following the contraction of 1.6% in the previous three-month period. | A decline of about 1.5% had been expected following the contraction of 1.6% in the previous three-month period. |
| This may go down as the week that defined Britain's political and economic choices for at least a decade Stephanie Flanders, BBC economics editor Read Stephanie's blog in full Taking the UK's economic pulse Send us your comments | This may go down as the week that defined Britain's political and economic choices for at least a decade Stephanie Flanders, BBC economics editor Read Stephanie's blog in full Taking the UK's economic pulse Send us your comments |
| Taken together, it was the worst six-month decline in GDP since the ONS began publishing the figures. | Taken together, it was the worst six-month decline in GDP since the ONS began publishing the figures. |
| 'Weakness to come' | 'Weakness to come' |
| The ONS figures also showed that GDP for the year to the end of March was down by 4.1%. | The ONS figures also showed that GDP for the year to the end of March was down by 4.1%. |
| The latest figures mean that GDP has now shrunk for three quarters in a row, and confirm that the economy is still deep in recession. | The latest figures mean that GDP has now shrunk for three quarters in a row, and confirm that the economy is still deep in recession. |
| The biggest contributor to the decline was the manufacturing sector, which shrank by 6.2% in the first three months of the year, having decreased by 4.9% in the previous quarter. | The biggest contributor to the decline was the manufacturing sector, which shrank by 6.2% in the first three months of the year, having decreased by 4.9% in the previous quarter. |
| "The last six months has seen the sharpest fall [in GDP] on record and the manufacturing number... is a record," Jon Beadle from the Office for National Statistics (ONS) told the BBC. | "The last six months has seen the sharpest fall [in GDP] on record and the manufacturing number... is a record," Jon Beadle from the Office for National Statistics (ONS) told the BBC. |
| Treasury minister Yvette Cooper: 'The economy will start to recover towards the end of this year' | Treasury minister Yvette Cooper: 'The economy will start to recover towards the end of this year' |
| Only two sectors managed any growth at all: government output and the agriculture, forestry and fishing sector, both grew 0.3% in the period. | Only two sectors managed any growth at all: government output and the agriculture, forestry and fishing sector, both grew 0.3% in the period. |
| Analysts suggested that this would be the worst contraction in the current recession. | Analysts suggested that this would be the worst contraction in the current recession. |
| "I very much doubt that GDP is going to contract at these sort of rates for any longer, but I do think it will still contract all throughout 2009," said George Buckley at Deutsche Bank. | "I very much doubt that GDP is going to contract at these sort of rates for any longer, but I do think it will still contract all throughout 2009," said George Buckley at Deutsche Bank. |
| "So there's still a lot of weakness to come, but not as weak as we're seeing today." | "So there's still a lot of weakness to come, but not as weak as we're seeing today." |
| Gloomy forecasts | Gloomy forecasts |
| The worse-than-expected figure casts doubt on the chancellor's prediction that GDP for the whole of 2009 would only shrink by 3.5%. | The worse-than-expected figure casts doubt on the chancellor's prediction that GDP for the whole of 2009 would only shrink by 3.5%. |
| How to cope with recession | How to cope with recession |
| "A contraction of at least 4% is much more likely," said Benjamin Williamson at the Centre for Economic and Business Research. | "A contraction of at least 4% is much more likely," said Benjamin Williamson at the Centre for Economic and Business Research. |
| "Our latest forecast is for a 4.5% contraction this year, making 2009 the steepest single year contraction in economic activity since the 5.1% fall in 1931." | "Our latest forecast is for a 4.5% contraction this year, making 2009 the steepest single year contraction in economic activity since the 5.1% fall in 1931." |
| The International Monetary Funds predicted a 4.1% decline for 2009. | The International Monetary Funds predicted a 4.1% decline for 2009. |
| Chief Secretary to the Treasury Yvette Cooper said the government stood by its forecasts. | Chief Secretary to the Treasury Yvette Cooper said the government stood by its forecasts. |
| "We believe the economy will start to recover towards the end of this year," she told the BBC. | "We believe the economy will start to recover towards the end of this year," she told the BBC. |
| 'Optimistic' | |
| But Conservative leader David Cameron said the figures showed the government had a wildly optimistic view of the state of the UK economy: | |
| "The chancellor gave a set of forecasts in the Budget," he said. "Everyone said they were over optimistic, and already, just a few days later, the next lot of official figures coming out shows that he's been over optimistic, shows that what the government's been doing hasn't been working." | |
| James Knightley, an economist at ING Bank, said: "Today's GDP report does again highlight how optimistic Chancellor Darling was in his budget assumptions." | James Knightley, an economist at ING Bank, said: "Today's GDP report does again highlight how optimistic Chancellor Darling was in his budget assumptions." |
| Alistair Darling had also predicted that GDP in the first three months of the year would be at a similar level to that seen in the previous quarter. | Alistair Darling had also predicted that GDP in the first three months of the year would be at a similar level to that seen in the previous quarter. |
| The ONS cautioned that the GDP figure was only its preliminary estimate and could be revised. | The ONS cautioned that the GDP figure was only its preliminary estimate and could be revised. |
| There was some better news for the economy in the latest retail sales figures. | There was some better news for the economy in the latest retail sales figures. |
| Retail sales unexpectedly rose 0.3% in March, making them 1.5% above the level seen in March 2008. | Retail sales unexpectedly rose 0.3% in March, making them 1.5% above the level seen in March 2008. |