UK GDP was down .5% in the fourth quarter of 2010. The drop was not expected and indicates that as the nation enters a period of austerity its fortunes are unlikely to be aided by a rise in tax receipts

The Office for National Statistics reported that

Gross Domestic Product (GDP) decreased by 0.5 per cent in the fourth quarter of 2010, compared with an increase of 0.7 per cent in the previous quarter. The GDP estimate was significantly affected by the bad weather in December; more analysis is provided in the bulletin. The decline in the fourth quarter is due to decreases in two of the component aggregate series, namely services and construction.

 

The data is likely to unsettle global capital markets investors who might think the the European region economy might recover soon. It also undermines forecasts of improvement in global GDP just issued by the IMF

Douglas A. McIntyre