Investing.com - The U.K. economy contracted more-than-expected in the final three months of 2011, shrinking for the first time since the fourth quarter of 2010, preliminary official data showed on Wednesday.
In a report, the Office for National Statistics said gross domestic product declined by a seasonally adjusted 0.2% in the fourth quarter, worse than expectations for a 0.1% contraction.
The U.K.’s economy grew by 0.6% in the preceding quarter.
Year-over-year, the U.K. economy grew at an annualized rate of 0.8% in the fourth quarter, broadly in line with market expectations. The U.K. economy grew at an annualized rate of 0.5% in the preceding quarter.
Weaker industrial activity was the key drag on economic growth. The U.K. economy was expected to slip back into a mild recession in 2012 as exports weaken and fiscal austerity weighs on domestic demand.
Output of the production industries decreased by 1.2% in the fourth quarter, compared with an increase of 0.2% in the previous quarter
Construction sector output decreased by 0.5% in the final three months of last year, compared with an increase of 0.3% in the previous quarter.
Following the release of that data, the pound held on to losses against the U.S. dollar, with GBP/USD falling 0.45% to trade at 1.5555.
Meanwhile, European stock markets turned mixed to lower. London’s FTSE 100 fell 0.25%, the EURO STOXX 50 slumped 0.7%, France’s CAC 40 declined 0.5%, while Germany's DAX dipped 0.2%.
In a report, the Office for National Statistics said gross domestic product declined by a seasonally adjusted 0.2% in the fourth quarter, worse than expectations for a 0.1% contraction.
The U.K.’s economy grew by 0.6% in the preceding quarter.
Year-over-year, the U.K. economy grew at an annualized rate of 0.8% in the fourth quarter, broadly in line with market expectations. The U.K. economy grew at an annualized rate of 0.5% in the preceding quarter.
Weaker industrial activity was the key drag on economic growth. The U.K. economy was expected to slip back into a mild recession in 2012 as exports weaken and fiscal austerity weighs on domestic demand.
Output of the production industries decreased by 1.2% in the fourth quarter, compared with an increase of 0.2% in the previous quarter
Construction sector output decreased by 0.5% in the final three months of last year, compared with an increase of 0.3% in the previous quarter.
Following the release of that data, the pound held on to losses against the U.S. dollar, with GBP/USD falling 0.45% to trade at 1.5555.
Meanwhile, European stock markets turned mixed to lower. London’s FTSE 100 fell 0.25%, the EURO STOXX 50 slumped 0.7%, France’s CAC 40 declined 0.5%, while Germany's DAX dipped 0.2%.