Britain’s economy dropped by about .5% over the final quarter of 2010 ruining the day of those who had hoped to see the economy show some growth over the last quarter due to the poor winter weather that dashed hopes of retailers to see high Christmas sales.
The slump came unpredictably after the year was marked prominent growth and has caused many experts nervous who have been concerned that the country may be on the brink of a double dip recession due to new austerity measures.
Over the three months leading up to December the GDP fell by about .5% in the face of a positive .7% increase over the third quarter according to a statement from the ONS (Office for National Statistics).
This the first drop in the GDP since 2009 and went against the wide spread expectation that there would be another increase over the fourth quarter of last year.
City Index in London staffer Joshua Raymond stated that the GDP figure has shocked those in finance and has increased fear that coalition government’s new austerity program will prevent growth from occurring sending the country back into a dreaded recession once more. Technically, a country is said to be in a recession after two quarters in which the GDP falls.
After the data was released on Tuesday the London stock market crashed and the British pound dropped with many economists predicting that the Bank of England will not raise the interest rates in an effort to stop inflation from flying sky high.
At the same time, the International Monetary Fund stated that the global economic recovery is starting to finally show positive signs of traction but there is still a high chance of it turning around due to the act that there is still not enough financial reform in place and still high concern over debt.