24 Jan : For the first time in nearly 18 years, the United Kingdom has slipped into recession as the nation’s economy contracted 1.5 per cent in the fourth quarter of last year, primarily due to a steep plunge in manufacturing activities.With two consecutive quarters of negative growth, UK is officially in recession, joining the likes of US, Singapore and many European nations, including Germany and Italy.
In the third quarter of 2008, the country’s GDP had shrunk by 0.6 per cent."Gross Domestic Product contracted by 1.5 per cent in the fourth quarter of 2008, compared with a decrease of 0.6 per cent in the third quarter.
The increased rate of decline in output was due to weaker services and production industries output," the Office for National Statistics said in a statement on Friday.
The fall in the fourth-quarter GDP was the biggest since the second quarter of 1980.Major countries are witnessing recession in the wake of deteriorating economic conditions, triggered by the American subprime crisis last year.
The worsening economy has also forced the British government to come up with two rescue packages in a span of three months, mainly to prop up the country’s battered financial system.
While the total production output weakened further in the fourth quarter, poor manufacturing output contributed the most to the negative growth.
"Manufacturing output made the largest contribution to the slowdown, falling by 4.6 per cent compared with a 1.6 per cent decrease in the previous quarter," the statement said.
Except for agriculture, forestry and fishing output, all the components of the economy declined in the fourth quarter as compared to the previous three months.