Economy 'Shrinks by 1.9%'

by Michael Ross
Posted by Hannah on 24 April 2009
Economy 'Shrinks by 1.9%'

The results have come in far worse than expected and mark the largest three-month decline in economic output since 1979.

Britain's economy suffered its biggest quarterly drop for decades over January-March, official figures confirmed today.

Economic output was revealed to have declined by 1.9 percent, a sharper drop even than October to December 2008's -1.6 percent. The quarterly decline is the sharpest contraction measured in output figures since 1979 - and is worse than economists' expectations.

Earlier this week, chancellor of the exchequer Alistair Darling suggested that output would only fall by 1.6 percent, while the Confederation of British Industry had pencilled in a 1.8 percent drop. Mr Darling also said that the economy would contract by 3.5 percent over 2009 - but other groups including the International Monetary Fund predict the decline to be over four percent.

Chief economist at the British Chambers of Commerce David Kern commented: "This decline is much worse than expected and shows that the downturn is more severe than most analysts thought.

The fall in activity across all sectors indicates that the measures taken to fight the recession so far have not been enough."

The new output data also included the largest quarterly fall in manufacturing output since records began in 1948 and the biggest decline in business services and finance output since records began in 1983.

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