The UK is officially in recession. Confirmation came this morning when figures published by the Office for National Statistics showed the economy shrank by 1.5pc in the final three months of last year. It follows a 0.6pc fall in the third quarter of 2008, and is the steepest quarterly contraction since 1980. Economists had been predicting a 1.2pc fall for the final quarter. British Prime Minister Gordon Brown described the recession as the worst since the Great Depression in the 1930s, adding that the recession this time is not the result of local economy mismanagement, but of a complete failure of the markets as a result of the economic crisis in the United States.
Brown said the decline in the British economic growth was the worst in 28 years. He supported the steps taken by the Minister of Finance to pump billions of pounds in the banking system. Experts think that the main reason behind the recession is a decline in the services sector, which provides for three-quarters of British gross domestic product. Famous British investor Jim Rogers, chairman of Singapore-based Rogers Holdings, said the British pound sterling was over and people should avoid investing in Britain. This comes at a time when most global economies have been dominated by pessimistic expectations. The World Bank expected the German economy (described as the engine of Europe) to retreat by 2.5%, while the Central Bank of Japan predicted that the national economy would decline by 2%. In addition, the Chinese growth rate fell from 13 % to 9% and there have been expectations that most major Asian economies such as South Korea, Taiwan and Singapore will also shrink.
