"One-time factors are playing a part, but nonetheless the GDP number is extremely disappointing"
- Shaw, an economist at Investec Securities
Britain's economy shrank more than initially was expected during the last three months of 2012, further fuelling fears that the economy could re-enter recession. The Office for National Statistics (ONS) said that the gross domestic product shrank by 0.3% during the last three months of 2012, prior to that the economy expanded by 0.9%. The data came even below analysts' expectations, which called for a 0.1% contraction. The reading also shows that the boost from the Olympic Games unwound and oil and gas output plunged. Manufacturing sector fell by 1.5%, however, the services sector was flat, while the construction sector even rose by 0.3% in the fourth quarter.
"One-time factors are playing a part, but nonetheless the GDP number is extremely disappointing," said Philip Shaw, an economist at Investec Securities in London. "The talk around the U.K. economy is now all going to be about, are we in a triple dip, which is not great for confidence. If we continue to see weak data, more stimulus becomes a possibility."
"Now we can either run away from those problems or we can confront them. And I'm determined to confront them so we can go on creating jobs for the people of this country," Mr Osborne said.
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