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The UK economy slips further into a double dip recession after the output of the economy fell by 0.7 percent.
The UK economy is slipping further into a double dip recession after the output of the economy fell by 0.7% between April and June.
The contraction was much bigger than expected and the UK, which is Europe’s third largest economy, is struggling to climb out of the deep recession.
Prime Minister David Cameron has been a champion of austerity, implementing tax hikes and deep spending cuts to help reduce the debt but results so far have been less than stellar. The Guardian newspaper reported that economic output has declined in five of the last seven quarters.
Cameron told the BBC that the figures “show the extent of the economic difficulties that we're grappling with, not least the situation right across the eurozone where our neighbours are also really struggling.”
“Clearly we've got to keep doing everything we can to get out of this difficult situation and provide the growth and jobs that our people and our economy needs,” he added.
Opposition leader Ed Balls said the figures showed that the government’s economic plans were a failure.
The Office for National Statistics heaps most of the blame for the negative figures on slumps in the construction and manufacturing industries. An extra holiday to mark the Queen’s Jubilee and unseasonably wet weather also contributed to “uncertainty”.
Job figures have been climbing modestly with 181,000 new jobs added in the past three months.
Even with that small improvement, the output of the economy is still 4.5% lower than it was during its peak before the onset of the financial crisis in 2008.
The figures released Wednesday follow a decline in GDP of 0.3% in the first three months of 2012 and a 0.4% decline in the last quarter of 2011.
"This is terrible data. Frankly there's nothing good that comes out of these numbers at all," Peter Dixon, an economist at Commerzbank, told Reuters. "The economy looks to be badly holed below the water line at this stage. It's a far worse period of activity than we'd expected."
The UK currency hit its lowest level against the dollar in nearly two weeks after Wednesday’s GDP report.