LONDON, Jan. 25 (UPI) -- Britain's Office of National Statistics said the country's economy shrank by 0.3 percent in the fourth quarter of 2012 compared to the third.
In a preliminary estimate, the ONS said the economy was flat in 2012 compared to 2011. The economy, however, pulled narrowly out of its second recession in the third quarter with gross domestic product growth at 0.9 percent.
This week International Monetary Fund Chief Economist Olivier Blanchard said Britain should rethink its overall strategy of consolidating debt.
While attending the World Economic Forum in Davos, Switzerland, Finance Minister George Osborne responded quickly by saying debt consolidation was allowing Britain to borrow at low rates, CNNMoney reported.
"Credibility is very hard won and easily lost. And I think it would be a huge mistake to put that at risk," Osborne said.
In a research note for clients, however, economists at Nomura said "another contraction ... and thus a "triple-dip recession -- seems worryingly easy to deliver."
ONS said that output of production industries fell 1.8 percent in the final quarter of the year compared to the July through September period.
The industrial output drop follows a 0.7 percent increase in the previous quarter-to-quarter report.
ONS said the construction sector came out of a slump, albeit just barely. The construction sector gained 0.3 percent in the fourth quarter after contracting by 2.5 percent in the third quarter and shrinking 3 percent in the second quarter.
Overall, the gross domestic product for Britain was estimated to be flat from 2011 to 2012 -- no expansion and no contraction over the course of the year, ONS said.
"Users are, however, reminded that this figure is subject to revision in the second estimate of GDP when all quarters of 2012 are open for revision," the national data office said.
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