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British GDP slightly lower than expected

Feb. 25, 2011 at 12:31 PM   |   Comments

LONDON, Feb. 25 (UPI) -- The Office for National Statistics in Britain lowered its estimate of fourth-quarter economic activity, saying the gross domestic product shrank 0.6 percent.

The national data bureau maintained its reasoning that severe winter weather in December contributed to the contraction, which was previously estimated at minus 0.5 percent, The Guardian reported Friday.

December was the coldest month on record, the newspaper said.

The ONS said service industry activity was down 0.7 percent in the final quarter, with economic output at financial businesses contracting 1.1 percent.

Industrial production also fell 0.7 percent although this figure was revised higher from a previous estimate of minus 0.9 percent.

Overall, "The government's hope of an upwards revision of growth has been dashed. It's time to wake up and smell an economy in big trouble," said Trades Union Congress General Secretary Brendan Barber.

Economist James Knightley at ING said the declining GDP was "fairly worrying given we know about the wave of fiscal austerity that is now starting to hit the U.K. economy. We will soon be starting to see negative figures for this component."

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