Breaking news: Economy shrank in last quarter

THE UK economy contracted in the final quarter of 2011, according to new figures.

GDP fell by 0.2% at the end of last year following 0.6% growth in the third quarter.

The figures add to pressure on the Government and the Bank of England to take further action to stimulate the economy.

A negative figure for the first quarter of 2012 would put the UK economy back in technical recession.

Many analysts were already forecasting a further expansion of the Bank of England’s quantitative easing programme and the latest GDP figures could hasten that decision when the Monetary Policy Committee meets next month.

Taken together with figures from earlier quarters, the Office for National Statistics now estimates the UK economy grew by 0.9% during 2011.

The Office for National Statistics said that output in the production industries, which includes manufacturing, fell by 1.2%.

Construction output fell 0.5% while the services sector saw no change.