UK Economy: The UK is back in recession says OECD study
The UK economy is slipping back into technical recession as growth declines in the first three months of 2012, says a think tank study.
The Paris-based Organisation for Economic Co-operation and Development (OECD) expects the UK's GDP to have dropped by an annualised 0.4% in the first quarter of 2012.
OECD has also warned that the UK’s economic growth will recover at the slowest pace among the world’s biggest economies in the first half of 2012.
The OECD's forecast follows depressing statistics released by the Office for National Statistics (ONS), revealing worse than expected fourth quarter 2011 GDP figures, of 0.3% rather than the 0.2% estimated earlier.
Economic data for first quarter 2012 is expected to be unveiled by the ONS on April 25.
Chancellor George Osborne sought to play down the OECD estimate. “This is a forecast; our own forecast from our own independent body, which we published last week, says we are going to avoid a recession.”
However, Ed Balls, Labour’s shadow chancellor, blamed the government's policies for the absence of growth. He said: “Last year the deputy head of the OECD said if growth is slower than expected the government should slow down the pace of tax rises and spending cuts.
“That is what the OECD is now forecasting and, with our economy flatlining for over a year, it’s time the chancellor listened to wise advice.”