The decline can be largely attributed to the Eurozone crisis, which put spending decisions on hold across on the economy
The ITEM Club said…
‘As we feared, a decline in GDP in Q4 is likely to be the first leg of a technical recession. The dire monthly output data for the early part of the quarter indicated that the economy had probably contracted in Q4.
‘You can trace this figure back to the escalation of the Eurozone crisis. The heightened uncertainty has damaged confidence, causing businesses and consumers to put their spending decisions on hold, paralysing the UK economy. There is a danger that this situation will persist, in the absence of a credible and sustainable solution to the Eurozones woes.’
It is very likely that we will see another small contraction in the current 3 month quarter, leading to the dreaded ‘double dip’, before a slow recovery takes place later in the second half of the year.