The British economy ground to a halt in the final quarter of last year, the Daily Telegraph said, leaving it at its lowest ebb since 1992, on the back of slow service sector growth and a continued slide in manufacturing output.
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According to the newspaper, revised figures from the Office of National Statistics published yesterday showed an estimated fourth-quarter gross domestic product (GDP) growth of zero, compared with previous estimates of 0.2 percent.
That figure was the worst since the British economy was emerging from its last recession in the second quarter of 1992, the Telegraph said, adding that the GDP growth rate for 2001 was revised down from 1.9 percent to 1.7 percent.
Manufacturing output continued to fall, with a decline of 5.6 percent, the Telegraph added.
The newspaper, citing analysts at Martin Hamblin, said that the figures came amid signs that British consumer confidence slipped this month compared with the surge registered in January.
The newspaper cited HSBC economist John Butler predicting job cuts in Britain following the disappointing fourth-quarter GDP figures.
“Last year’s big winners were consumers, at the expense of corporates which saw a big squeeze in profits while wages rose. The way companies are dealing with this is making redundancies,” Butler told the Daily Telegraph.
He added that this would lead to “a soft slowdown followed by a soft recovery”, which he described as “the Bank of England’s perfect scenario”, the Telegraph said.
However, the Daily Telegraph cited Germany’s finance minister Hans Eichel as saying that the German economy had reached its trough, adding that he was optimistic that Britain, Denmark and Sweden would join the euro.
“There exists the possibility that the euro in the not-so-distant future will become effective in Britain, Denmark and Sweden. More and more countries want to adopt the euro,” Eichel said, according to the Daily Telegraph.
