Government figures have confirmed that the UK is officially in recession for the first time since the early 1990s. The economy shrank at the fastest pace in nearly 30 years in the fourth quarter of last year.
The figures confirm that gross domestic product fell by 1.5% in 2008’s final quarter, following on from a 0.6% contraction in the previous three months, pushing the country into an official recession.
The Government says that the figures also show the biggest quarter-on-quarter decline since 1980, and are a cause for concern with unemployment rising.
Latest figures have revealed that 1.92 million people are now out of work, the housing market remains severely depressed and retail sales are weak – the worst state the economy has been in for just under two decades.
Analysts now forecast that by the end of 2009, gross domestic profit will have declined by a further 2.1$, although the official government forecast is for a decline of 0.75% to 1.25% in 2009.
The figures come despite numerous efforts to prevent recession including interest rate cuts to 1.5% – aimed at driving down the cost of lending and making it easier for consumers and businesses to access credit and a temporary cut in value added tax (VAT), from 17.5% to 15%.