UK economy hasn’t bottomed out, contracted 0.4% in third quarter

10-24-2009 11:38

The performance of the UK economy did not correspond with the estimations by analysts, which forecasted that the British economy would be the next European country to leave the recession behind, as it contracted another 0.4% in the third quarter. Especially the recession in the financial sector and real estate sector affected the British economy.

UK economy contracted

The third quarter figures have been the most gloomy data for the UK economy since record keeping began in 1955. This week’s figures could demonstrate a modest growth or a slight decline, according to expert economists that were mostly positive concerning a modest economic growth. However, the UK economy contracted, bringing the total contraction in output to 5.9% since the start of the economic slump.

Not bottomed out

Despite the measures by the UK government and the British central bank to stimulate the economy, it has continued its downturn. The efforts include maintaining the interest rates at 0.5% since March 2009, which is the lowest level ever in Britain. The government also invested £175 billion in stimulus measures as well as billions of Pounds in monetary measures.

Industrial production – Services

Services dropped by 0.2%, while the output from retail, wholesale, hotels and restaurants declined 1% in the preceding quarter. Industrial output fell 0.7% in the previous quarter, bringing the total decline to 13.7% since the start of the economic slump.
The British economy was just like the US economy affected hard by the real estate sector slump, while the financial sector in the UK was also hit given the fact that the government had to save large banks with bailout plans that represent a value of multibillion Pounds.