Darling confident of seeing economy through to recovery
- 00:01:54
- ITN
Darling confident of seeing economy through to recovery
Fears over the state of the economy have been confirmed after figures showed Britain has officially entered recession. The economy contracted by 1.5 per cent in the final three months of 2008 - the worst performance in more than 28 years, according to the Office for National Statistics. London's FTSE 100 index plummeted back below the 4000 barrier at one stage after the grim output figures, while the pound slumped to its lowest level against the dollar since 1985. The estimated fall in quarter-on-quarter gross GDP comes after a 0.6 per cent decline in the previous three months - a "technical" recession, as defined by two successive quarters of negative output. The annual rate of output in 2008 is also set to make for grim reading in what will be a far cry from the 3 per cent seen in 2007. Figures already published this week confirm an increasingly gloomy economic picture. In the latest manufacturing sector survey, data showed activity slumped to its worst since July 1991 over the past three months, with the outlook the bleakest in 28 years. Official statistics revealed that unemployment increased by 131,000 to 1.92 million in the three months to November to the highest level in more than a decade. Business body the CBI warned the recession was set to be worse than that of the early 1990s. John Cridland, CBI deputy director-general, said: "The intensity and speed of falling demand combined with the global credit crunch mean this recession is going to be more painful than the early 1990s and sadly one consequence of this will be much higher unemployment." And Charles Davis at the Centre for Economic and Business Research (CEBR), said: "It is not just the fact that the UK has officially entered recession that will cause concern; it is the size of the contraction. "This supports our view that the economy is set for the steepest contraction in the post war era in 2009."
ITN | January 23, 2009
