25 February 2011
The economic contraction at the end of last year was worse than originally estimated, according to official figures.
The Office for National Statistics today published a revised growth report, which showed that gross domestic product contracted by 0.6% in the fourth quarter of 2010, down from its estimated fall of 0.5%.
Output from the production industries was revised down from 0.9% to 0.7%. Within this sector, output from manufacturing and utilities increased by 1.1% and 4.6% respectively, whilst mining and quarrying output fell by 4.5%.
In the construction sector, output fell by 2.5%, revised up from a fall of 3.3%.
ONS chief economist Joe Grice said the cold weather at the end of last year accounted for 0.5% of the contraction.
‘On the basis of that, the economy is still flattish at minus 0.1%. The overall picture is still a flattish underlying economy in the fourth quarter,’ he told the BBC.
Tony Dolphin, senior economist at the Institute for Public Policy Research, urged Chancellor George Osborne to ensure next month’s Budget stimulated growth.
‘So far, the focus has been on taking short cuts to growth through spending cuts, cuts in corporation tax and cuts in regulation. But the lack of growth in the economy suggests this plan is not working,’ Dolphin said.
‘What’s needed is a “plan B” that takes the high road to growth, with an active, strategic role for government in promoting investment, innovation and job creation. The economic recovery will not be led by the financial sector alone and there needs to be a much greater focus on regional development to support enterprise which creates jobs outside the capital.’
