Abstract

Latest data reports a contraction in the UK economy for the third successive quarter. Output in the first quarter of 2009 was 1.9 per cent lower than in the previous quarter, and 4.1 per cent lower than the same quarter in 2008. Manufacturing and the other production industries have made the largest contributions to the fall in output, with other notable contributions coming from the construction, distribution, hotels and catering, and the business and financial services sectors. New data on the expenditure measure of Gross Domestic Product shows that inventories and investment spending have driven the downturn despite positive offsetting contributions from net trade and government spending. The labour market has weakened further with unemployment rising to 7.1 per cent in March. Inflation in the Consumer Prices Index has fallen to 2.3 per cent as energy and food price inflation continues to moderate.