by: Angela Monaghan
July 25, 2012
The UK economy has shrunk by a shock 0.7pc in the second quarter, far more than expected as record rainfall and the Jubilee holiday added to pressure from austerity cuts and the eurozone debt crisis.
The figures from the Office for National Statistics are much worse than forecasts for a 0.2pc contraction.
It marks the third successive quarter of contraction, leaving Britain in its longest double-dip recession in more than 50 years. The economyshrank by 0.3pc in the first quarter of the year, following a 0.4pc contraction in the final quarter of 2011.
The news will increase pressure on Finance Minister George Osborne to ease up on his austerity measures and push for growth.
The Chancellor called the deeper-than-expected contraction disappointing and confirmed the country’s deep-rooted economic problems.
“We’re dealing with our debts at home and the debt crisis abroad. We’ve made progress over the last two years in cutting the deficit by 25 per cent and businesses have created over 800,000 new jobs,” he said in a statement.
“But given what’s happening in the world we need a relentless focus on the economy and recent announcements on infrastructure and lending show that’s exactly what we’re doing.”