UK GDP in Q4 2011 fell 0.3% on the quarter; revised down from previous estimate of 0.2% fall
Commenting on the revised GDP figure for the fourth quarter of 2011, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The revised GDP figure for the fourth quarter is disappointing, with most analysts expecting the ONS to confirm its previous estimate of a 0.2% fall. The downward revision is largely due to the new estimate that the service sector fell by 0.1% on the quarter, with the ONS previously suggesting that services were unchanged. Although the fall in investment was much smaller than expected, the improvement in net exports was not as strong as we had hoped.
“The UK economy faces huge challenges, but we still believe that GDP has returned to positive growth in the first quarter of 2012 and there will be no new recession. But the austerity measures and unresolved problems in the eurozone will continue to put pressure on the economy, so it is crucial that policies to support growth are put at the top of the agenda.
“The recent Budget has not done enough to benefit small- and medium-sized businesses. More must be done as a matter of urgency to help firms create jobs, export and invest. While the government perseveres with measures to reduce the deficit, priorities must be reallocated within the overall spending envelope. The credit easing programme needs to be made more substantial, and the MPC must ensure that the QE programme encourages increased lending for smaller firms. Ministers must also look seriously at prospects for the creation of an SME bank.”