Investing.com - The U.K. economy contracted unexpectedly in the first three months of 2012, shrinking for the second consecutive quarter and slipping back in to a recession, 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 first quarter, defying expectations for a modest 0.1% expansion.
The U.K.’s economy shrank by 0.3% in the final three months of 2011, downwardly revised from contraction of 0.2%.
A technical recession is defined as two straight quarters of contraction.
Year-over-year, U.K. economic growth was flat in the first quarter, confounding expectations for growth of 0.3%. The U.K. economy grew at an annualized rate of 0.5% in the preceding quarter.
Output of the production industries decreased by 0.4% in the first quarter, following a decrease of 1.3% in the previous quarter.
Construction sector output declined 3.0%, following a decrease of 0.2% in the previous quarter, while output of the service industries increased by 0.1%, following a decrease of 0.1% in the previous quarter.
Following the release of that data, the pound turned lower against the U.S. dollar, with GBP/USD falling 0.3% to trade at 1.6097.
Meanwhile, European stock markets remained higher. London’s FTSE 100 rose 0.4%, the EURO STOXX 50 rallied 1.3%, France’s CAC 40 surged 1.4%, while Germany's DAX jumped 1.2%.
In a report, the Office for National Statistics said gross domestic product declined by a seasonally adjusted 0.2% in the first quarter, defying expectations for a modest 0.1% expansion.
The U.K.’s economy shrank by 0.3% in the final three months of 2011, downwardly revised from contraction of 0.2%.
A technical recession is defined as two straight quarters of contraction.
Year-over-year, U.K. economic growth was flat in the first quarter, confounding expectations for growth of 0.3%. The U.K. economy grew at an annualized rate of 0.5% in the preceding quarter.
Output of the production industries decreased by 0.4% in the first quarter, following a decrease of 1.3% in the previous quarter.
Construction sector output declined 3.0%, following a decrease of 0.2% in the previous quarter, while output of the service industries increased by 0.1%, following a decrease of 0.1% in the previous quarter.
Following the release of that data, the pound turned lower against the U.S. dollar, with GBP/USD falling 0.3% to trade at 1.6097.
Meanwhile, European stock markets remained higher. London’s FTSE 100 rose 0.4%, the EURO STOXX 50 rallied 1.3%, France’s CAC 40 surged 1.4%, while Germany's DAX jumped 1.2%.