Open

Coming up

Don't miss

Replay


LATEST SHOWS

WEB NEWS

'Ice Bucket Challenge' angers anti-abortion activists

Read more

#TECH 24

Tomorrow's Transport Today

Read more

FOCUS

Mothers and children leaving Honduras at all costs

Read more

INSIDE THE AMERICAS

US journalist Peter Theo Curtis freed in Syria

Read more

ENCORE!

An art wonderland: A burnt-out piano, a bed in a box and a giant magic mushroom

Read more

THE INTERVIEW

Historian Jean Garrigues: 'For the first time, Hollande knows what he is doing'

Read more

MEDIAWATCH

'Macron-economy' pun already worn out

Read more

DEBATE

What Next for Gaza? Lasting Ceasefire Agreed After 50 Days of War

Read more

DEBATE

What Next for Gaza? Lasting Ceasefire Agreed After 50 Days of War (part 2)

Read more

  • UN says 43 peacekeepers captured in Golan Heights

    Read more

  • Russian troops have entered Ukraine, says Kiev

    Read more

  • Brad Pitt and Angelina Jolie say ‘I do’ in France

    Read more

  • Assad cannot be partner in fight against terrorism, says Hollande

    Read more

  • New Ebola case in Nigeria brings death toll to 1,552

    Read more

  • Video: 'Neither Baghdad nor the US can defeat the Islamic State'

    Read more

  • Platini will not run against Blatter for FIFA presidency

    Read more

  • Air France pilots announce week-long strike in September

    Read more

  • Erdogan's inauguration paves way for constitutional change

    Read more

  • New French economy minister takes swipe at 35-hour work week

    Read more

  • Air France suspends flights to Ebola-stricken Sierra Leone

    Read more

  • Uzi shooting by 9-year-old rekindles gun debate

    Read more

  • Mother of American journalist asks IS leader for his release

    Read more

  • UN probe accuses Syrian regime, Islamists of ‘crimes against humanity’

    Read more

  • Uruguayans sign up to grow marijuana at home

    Read more

  • Missouri governor appoints black public safety director

    Read more

  • French unemployment rises 0.8% in July to record high

    Read more

  • Video: Iraq’s Yazidis flee to spiritual capital of Lalish

    Read more

  • Video: Milan is starting point for Syrian refugees’ European odyssey

    Read more

Business

Economy shrinks at fastest pace in 50 years

Text by NEWS WIRES

Latest update : 2009-06-30

Britain's Gross domestic product (GDP) has shrunk by 2.4 percent in the first three months of the year, its fastest contraction since 1958, though analysts say a return to mild growth could be round the corner.

AFP - Britain's recession-battered economy shrank at its fastest pace in more than 50 years in the first quarter of 2009 in the worst global slowdown in decades, revised official data showed on Tuesday.

Gross domestic product (GDP) contracted 2.4 percent in the first three months of the year from the final quarter of 2008, said the Office for National Statistics, but analysts predicted a brighter future for the British economy.

"GDP in real terms fell by 2.4 percent compared with the previous quarter, revised down from last month's estimate of 1.9 percent. This is the largest decrease since the second quarter of 1958," the ONS said in a statement.

"Around half the revision ... is a result of new construction output data, while the remainder reflects more complete data for services," it added.

On a year-on-year basis, Britain's economy declined by 4.9 percent in the first quarter, the largest contraction since records began in 1948, and compared to the statistic office's earlier estimate of minus 4.1 percent.

Neighbouring Ireland's economy meanwhile shrank by 8.5 percent in the first quarter of 2009 compared to the same period in 2008, as the eurozone member was hammered by the financial crisis, separate official data showed Tuesday.

The former "Celtic Tiger" economy has been savaged by the global financial crisis and the collapse of a domestic property bubble. Last September it became the first eurozone member to fall into recession in the current downturn.

Like Britain, Ireland is also suffering from soaring unemployment.

Looking ahead, chief Britain economist at IHS Global Insight, Howard Archer, said on Tuesday: "Even deeper contraction in (British) GDP in the first quarter is obviously unwelcome news, but it is also old news and matters have moved on appreciably since then.

"The good news is that the economy probably at worst contracted only modestly in the second quarter and it is not inconceivable that it managed to eke out marginal growth."

The ONS on Tuesday added that GDP had stood at minus 0.1 percent in the second quarter of 2008 rather than showing flat growth, meaning Britain's current recession began earlier than expected.

However fresh signs of better times ahead for the British economy also appeared on Tuesday as home-loans provider Nationwide said British house prices had increased by 0.9 percent in June from May.

"House prices have now risen in three of the last four months, suggesting that the improvement that began to show up in March represents more than just statistical noise," Nationwide's chief economist Martin Gahbauer said in a statement.

Economists' consensus forecast had been for a 0.5 percent drop in house prices in June compared to May.

"On balance, the stabilisation of house prices is a welcome surprise that did not seem likely at the beginning of the year," said Gahbauer.

"However, there are still considerable headwinds facing the demand side and until we see a more robust recovery in house purchase activity, it is too early to be confident about a full-scale recovery of prices," he added.
 

Date created : 2009-06-30

COMMENT(S)