UK heading for triple-dip recession as GDP shrinks 0.3% in fourth quarter

Britain could be on course for its third recession in four years after the economy shrank 0.3% in the last three months of 2012.

The figures were worse than expected and could put pressure on the government to consider a "plan B" that would stimulate demand.

A fall in manufacturing output dragged down the economy, countering a small rise in construction between October and December, according to the Office for National Statistics. The economy achieved zero growth for the year as a whole.

Britain is experiencing 'worse slump than during Great Depression'
Stephen Boyle, head of group economics at the Royal Bank of Scotland, said the last time the economy was so bad was immediately after World War One and World War Two, when GDP fell in double digits.

"Those aside, 2008-12 fall was bigger than any since before Victoria ascended the throne," he said.

"It's the worst economic performance since at least 1830, outside of post-war demobilisations," he told The Daily Telegraph. "It's worse than the 1920s, it's worse than the Great Depression."

GDP: Public's confidence falls as just one in eight think economy is in good shape
As it emerged that the UK could be heading closer to a triple dip recession, research released by pollsters Ipsos MORI showed that only one in eight Britons believe the economy is in a good state.

In sharp contrast, the poll found that German voters are around five times more positive about their own economy than the British are.

According to the survey just 13 per cent of Britons are positive about the economy, compared to 63 per cent of Germans and 57 per cent of Swedes.

Dave, George and Boris 'out for pizza' night before GDP woe
The two most powerful men in Britain were out for dinner in Davos, Switzerland, after both giving speeches to business leaders at the World Economic Forum.

The Chancellor had already been given advance notice of Britain's poor GDP figures, which this morning were revealed to the public. They showed the economy went into reverse by 0.3 per cent in the last quarter of 2012.

Mr Osborne told an interviewer on Thursday afternoon that the economy is "heading in the right direction", even though it would be a "difficult path".

He and the Prime Minister were later spotted "loudly" joking and "laughing uproariously" along with Boris Johnson, the London Mayor, at a pizzeria in the Hotel Alte Post.

Huh??? Just this morning on CNBC’s “Squawk Box”, the financial gurus at their annual confab in Davos, Switzerland were bullish on Europe’s recovery. That certainly was short-lived.

A priceless moment occurred when a Greek Socialist politician was on singing the praises of Obama and telling the CNBC hosts that Obama is leading the way for Europe. When Joe Kernan asked, “You’re a Socialist, aren’t you?” The pol answered, “In the U.S. you call it “Liberals,” but in Europe it’s “Socialists.” The guest was dismissed and not a word of comment followed.

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