By Svenja O’Donnell
The U.K. economy shrank in the fourth quarter as companies scaled back investment, underscoring the risks to a recovery that Bank of England Governor Mervyn King says will be “slow and uncertain.”
Gross domestic product dropped 0.2 percent from the third quarter, the same as previously estimated, the Office for National Statistics said inLondon today. Economist predicted no revision, according to the median of 36 forecasts in a Bloomberg survey. Business investment fell 5.6 percent, the most since the first quarter of 2011.
A 0.5 percent rise in consumer spending, the first increase for 1 1/2 years, fuelled optimism that Britain will avoid recession. Still, King said Feb. 15 the central bank is ready to expand stimulus further if needed to aid an economy facing “substantial headwinds.” Unemployment (UKUEILOR) is climbing, credit is tight and the government is pushing through the deepest budget cuts in British peacetime...read more.
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