UK economy shrinks by 0.3%

The UK economy shrank by 0.3% in the last three months of 2012, further fuelling fears that the economy could re-enter recession.

The Office for National Statistics (ONS) said the fall in output was largely due to a drop in mining and quarrying, after maintenance delays at the UK's largest North Sea oil field.

The economy had grown by 0.9% in the previous quarter, boosted by the London 2012 Olympic Games.

For the whole year, growth was flat.

The ONS said that the “bumpy economy” was on a “sluggish trend”.

Each time these figures are produced the outlook looks bleaker and bleaker and the forecasts for growth get pushed further and further into the future, and becomes harder and harder for George Osborne to justify his economic strategy.

The UK could be on course for a triple-dip-recession and with many business leaders, economists and even his coalition partners calling for a change of tact, maybe today’s news will finally convince Osborne a fresh approach is required.

This is the fifth time out of the last eight quarters that the economy has contracted, and with mounting pressure from all sides now should be the time for Osborne to step up and admit he’s got his tactics wrong.

Obviously he won’t do that he’ll try and explain it away, but he needs to admit his plans aren’t working because if he continues to put the blinkers on and ignore the overwhelming evidence and refuse to change course, all he will do is inflict further damage.