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The UK’s economic recovery from 2009’s recession suffered an unexpected blow, a report from the Office of National Statistics (ONS) revealed today (as reported by the BBC).
The ONS said that the economy had contracted 0.5 per cent in the last quarter of 2010, following four consecutive quarters of growth.
Although the report is an estimate and subject to revision, the contraction has been met with shock. Previous predictions had expected growth to hit between 0.2 and 0.6 per cent.
Chancellor of the Exchequer George Osborne said the ONS report would not sway the Government from its austerity drive.
He said: "These are obviously disappointing numbers, but the ONS has made it very clear that the fall in GDP was driven by the terrible weather in December.
"There is no question of changing a fiscal plan that has established international credibility on the back of one very cold month. That would plunge Britain back into a financial crisis. We will not be blown off course by bad weather."
Newly installed shadow chancellor Ed Balls said of the news: "The fact is the recovery has completely stalled in the last three months of last year. This is an economy which was growing in the middle of the year, which has now ground to a halt.
"We have inflation going up, unemployment rising, now the economy not growing. And all those boasts from George Osborne and David Cameron that they’d secured the recovery – it seems as though the opposite has happened."
The effect of the bad weather at the end of 2010 has been the subject of some discussion, with the British Retail Council maintaining that the snow had had a limited impact on retail, at least.
Despite the bad news, the manufacturing sector saw 1.4 per cent expansion. Deputy PM Nick Clegg and business secretary Vince Cable launched a ‘Manufacturing Growth Review‘ at Brompton HQ this morning.
