The UK economy contracted at a faster-than-expected pace in the fourth quarter of 2011 as output of the dominant service sector declined.
The British economy shrank by 0.3% in the final three months of 2011 compared to the previous quarter, the UK Office for National Statistics (ONS) reported on Wednesday. The ONS had previously estimated a 0.2% quarterly contraction.
The UK's GDP in the October-December period rose by 0.5% over the year-ago period compared to an earlier estimate of 0.7%.
Chancellor of the Exchequer George Osborne yesterday said that Britain was now in the recovery phase.
The UK economy received a boost from net trade in the fourth quarter. Business investment fell 3.3%, less than the 5.6% fall previously estimated. Consumer spending rose 0.4% in the fourth quarter, though this was less than the 0.5% previously forecast.
Real household disposable income fell 0.2% in the fourth quarter, the second successive quarterly decline. The savings ratio - the share of post tax income put aside - fell to 7.7% from 7.9%.
The UK economy grew by 0.7% in 2011, with output in the fourth quarter 0.5% higher than the same period a year earlier, revised down from a previous estimate of 0.7%.
A separate report showed today that the UK's current-account deficit narrowed to 8.5 billion pounds in the period from a downwardly revised 10.5 billion pounds, as the trade gap fell.
By RAZI ANWAR(PGDM 2nd sem)
