Revised data shows that the UK economy shrank by 0.2% during the last quarter of 2011.The drop countered a previous rise of 0.6% in the third quarter. This is the second official estimate from the office of national statistics.
Sir Mervyn King, governor of the Bank of England has warned that it is likely for the economy to “zig-zag” this year. The fall in GDP was largely driven by the biggest drop in business investment for a year.
The production sector, which includes manufacturing, fell 1.4% compared with previous estimates of 1.2%. Ross Walker, UK economist at RBS said that he expected a return to growth for the first quarter of 2012. He said “I don’t think it will be a spectacular Q1 but I think we will squeeze some growth out of it.”
Other figures in the Q4 2011 estimate of GDP indicate that wages fell in current price terms by 0.3% and that household final consumption expenditure had increased by 0.5% in volume terms.