Britain officially enters recession

by Dave Keating | January 23, 2009 at 02:03 am

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Todaybthe UK officially entered recession with two straight quarters of negative growth. In the fourth quarter of 2008 the British economy shrank 1.2 percent, its worst performance in three decades. It is the first recession for the UK since 1991. The big question now is whether this recession will resemble that 1991 recession or the more serious British recession of 1980.

The decline would follow a 0.6 per cent contraction in Gross Domestic Product (GDP) in the third quarter and put Britain into a technical recession, defined as two consecutive quarters of negative growth.

A 1.2 per cent decline in fourth-quarter GDP would be the biggest contraction since the third quarter of 1990. However, some experts believe national output could have shrunk by 1.3 per cent or more, marking the biggest contraction in 28 years.