Britain in recession during fourth quarter of 2011
The UK economy moved into its second recession as gross domestic product fell 0.2 percent from the third quarter.
A drop in manufacturing and construction in the run-up to Christmas is being blamed for the slump and economists predict that now unemployment will rise further and many more companies will go bankrupt.
The Prime Minister admitted that the decline in output was disappointing but said the government would do everything to put Britain back on track.
Speaking to MPs at Prime Minister’s questions, Mr Cameron blamed a number of factors, but stated that most of the blame should be directed at the Labour party.
Ed Balls, Shadow Chancellor disagreed, blaming the government and their deep spending crisis:
“Far from the eurozone crisis being to blame, it is only rising exports that kept us out of recession last year. By clobbering the economy with spending cuts and tax rises that go too far and too fast, the government has left us badly exposed if the eurozone crisis deepens this year.”
On Tuesday the IMF predicted that there would be a mild recession in the eurozone after cutting its 2012 growth forecast from 1.6 percent to 0.6 percent.