British economy shrank in last quarter of 2008

Britain’s economy shrank by 1.6% in volume terms in the last quarter of 2008, official data shows.

The Office for National Statistics reports that the level of gross domestic product (GDP) is 2% lower than in the fourth quarter of 2007.

The worse-than-expected GDP fall was revised from a fall of 1.5% in the previous estimate.

The total volume of output in production industries fell by 4.5%, including manufacturing output, which fell by 4.9%. Construction output decreased by 4.9% and the output of the service industries by 2%, the report continues. The household savings ratio was 4.8%, compared with 1.7% in the previous quarter.

Retail sales also saw slow growth in February. Although retail sales were 0.4% higher than in February 2008, it was still the lowest growth since September 1995.

A second report by the Office for National Statistics shows that non-specialised stores decreased by 5.2%, while food stores recorded a 0.6% decrease. The report adds that non-store retailing and repair, which includes some aspects of internet sales, was 8.9% higher than in February 2008.

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