Slump Grips UK


Britain is falling deeper into slump, official figures revealed yesterday.

The UK economy shrank by 0.3 per cent in the first three months of this year, more than previously thought, revised Office for National Statistics figures show.

Last month’s initial ONS estimate showed a contraction of 0.2 per cent.

The downward revision was due to a bigger than previously estimated contraction in construction output of 4.8 per cent, compared with the initial estimate of three per cent.

The figures also showed unchanged growth in the service sector of 0.1 per cent, while household spending increased by the same amount.

A record increase in government spending of 1.6 per cent, since the first quarter of 2008, went some way to offsetting the overall contraction. This was driven largely by spending on health and defence.

In the final three months of 2011, the economy also shrank by 0.3 per cent.

Shadow chancellor Ed Balls commented: ‘It’s now clear that this is a recession made in Downing Street by this government’s failed policies.

‘Despite all the problems in the euro area, France, Germany and the eurozone as a whole have so far avoided recession and only exports to other countries stopped us going into recession a year ago.

‘The result is that Britain is now in a weaker position if things get worse in the eurozone in the coming months.’

TUC general secretary Brendan Barber said: ‘The government is taking our economy in completely the wrong direction.

‘Despite ministers’ efforts to blame Europe for everything the truth is many of our problems are home grown, with consumer spending and construction both struggling under the weight of the government’s austerity programme.

‘The government needs to face facts and focus on investment in infrastructure and jobs, rather than continue with self-defeating cuts that are holding back businesses, lowering living standards and failing to deal with the deficit.’

Unison warned that ‘the UK is facing the very real prospect of a third quarter of negative growth’.

Unison general secretary Dave Prentis said: ‘Unless the private sector can deliver an economic miracle, the UK is facing the very real and damaging prospect of a third quarter of negative growth.

‘A new set of cuts, pay freezes and job losses kicked in from the start of April – sucking yet more demand out of the economy and further reducing our chances of growth.

‘The government needs to stop blaming our economic woes on the crisis engulfing Europe and admit that its obsession with austerity is the main obstacle standing in the way of our economic recovery.’

• The Unite union said it is to hold urgent talks with Hewlett-Packard to safeguard up to 1,600 jobs under threat at its UK operations, after the computer giant announced it is to cut 27,000 jobs across the globe by the end of 2014.

Unite believes that up to eight per cent of the UK’s workforce of 20,000 are under threat – and Unite will be working with the PCS union to use every means possible to protect those jobs.

Hewlett-Packard’s UK offices are at Bracknell, Berkshire, Bristol, Derby, Dublin, London, Manchester and Sheffield.