The UK is technically back in recession. GDP declined by -0.2% in the 1st Q of 2012 on a Q/Q basis (-0.3% in the 4th Q 2011), below the gain of +0.1% expected and unchanged on an YoY basis. The decline was due to a slump of 3.0% in construction, the largest decline since 2009, together with a -0.4% drop in industrial production. Manufacturing declined by -0.1% and services were up by +0.1%. However, the decline in construction is surprising (all you have to do is look around you) and has to be viewed with deep suspicion. The ONS numbers generally paint a worse picture than is the case in reality. Indeed, industry and construction surveys suggest a much stronger economy. It’s high time the UK sorted out the ONS... Continue to read.
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