The United Kingdom is heading towards a triple-dip recession, new data released by Britain’s Office for National Statistics today indicate.
After the UK emerged from recession in the third quarter of 2012 with an Olympics-boosted 0.9 percent increase in gross domestic product, its GDP slipped again in the fourth quarter, falling 0.3 percent, CNN reported.
More from GlobalPost: UK economy falls deeper into double dip recession
UK officials said that the Q4 slowdown was caused by sluggish exports due to recession in the eurozone, a cold snap that deterred shoppers and a decline in oil and gas output in the North Sea due to the shutdown of an oil field for maintenance, the Guardian reported.
“Against headwinds, the underlying performance of the economy is doing OK,” Alan Clarke, an economist at Scotiabank in London, told Bloomberg News. Still, “it’s a pretty damning state of affairs if an outage at an oil rig or a bit of snow makes the difference between a negative and positive GDP result.”
According to the Guardian:
A triple-dip recession, or the third prolonged downturn since the credit crunch began, will occur if the economy contracts again in the first quarter of 2013.
A triple-dip recession could ding the UK’s AAA credit rating, possibly leading to an increase in borrowing costs, CNN reported."
Another contraction in Q1 – and thus a 'triple-dip' recession – seems worryingly easy to deliver," economists at Nomura said in a research note, according to CNN.
The new data prompted some British politicians to call on Chancellor of the Exchequer George Osborne to rip up his austerity agenda and introduce policies to spur economic growth, the Guardian reported.
"A plan B now should include a compulsory jobs guarantee for the long-term unemployed and a temporary VAT cut to boost family incomes and our struggling high streets,” Ed Balls, the shadow chancellor, said, according to the Guardian.
The US Commerce Department will report US fourth-quarter GDP data on Jan. 30, and the European Union’s statistics office will publish GDP data for the 17-nation euro area on Feb. 14, according to Bloomberg News.