The UK is heading back into recession and will be among the slowest of the world’s largest economies to recover in the first half of this year, according to a study by the Paris-based thinktank, the OECD.
Only Italy will struggle over a longer period to return to growth, highlighting the difficult situation confronting the British government as it battles to boost confidence and get the economy back on track.
In recent weeks surveys have shown the business and consumer sentiment falling back after an initial boost earlier this year.
The Office for National Statistics added to the gloomy prognosis for the economy on Wednesday when it reported a bigger fall in output in the final three months of 2011 than first estimated. It said a previous 0.2% drop in output had underestimated the size of the fall, which further analysis found to be 0.3%.
The OECD, which produces quarterly figures showing year-on-year growth, said that UK output declined at an annual rate of 1.2% in the final quarter of 2011 and will decline at an annual rate of 0.4% in the first three months of 2012.
The OECD also warned that the eurozone remained in a fragile state and would struggle to grow for the rest of the year.
Germany and France will race ahead of the UK in the first half of the year but are forecast to slow down as the year ends.
Read more at the Guardian…