Austerity Report: UK plunges into double-dip recession

(Bloomberg) The U.K. economy shrank in the first quarter as a slump in construction pushed Britain into its first double-dip recession since the 1970s.

Gross domestic product fell 0.2 percent from the fourth quarter of 2011, when it declined 0.3 percent, the Office for National Statistics said today in London. The median of 40 estimates in a Bloomberg News survey was for an increase of 0.1 percent. A technical recession is defined as two straight quarters of contraction.

The Bank of England is in the final month of its latest round of economic stimulus and the drop in output comes as prospects dim in the euro region, Britain’s biggest export market. As an anti-austerity backlash gains ground in Europe, the report may add to criticism of Prime Minister David Cameron and Chancellor of the Exchequer George Osborne’s budget cuts.

“This isn’t supportive of the fiscal consolidation program, so the government is likely to be concerned about that,” said Philip Rush, an economist at Nomura International in London. “The data were bad, and that supports the view that the Bank of England will do a final 25 billion pounds of quantitative easing in May.” ....................(more)

The complete piece is at: http://www.bloomberg.com/news/2012-04-25/u-k-returns-to-recession-in-first-quarter-on-building-slump.html