UK economy shrinks by 0.5%

The British economy has shrunk again after experiencing a small increase. The severe weather at the end of last year may have been the cause behind the contraction of the economy. The UK economy shrunk by 0.5% in the last quarter of 2010, according to figures revealed by the Office for National Statistics (ONS). The contraction is disappointing given the 0.7% growth experienced in the previous three months. GDP is now a full percentage point below the predicted growth of 0.5%. The wintry weather was cited as one of the reasons for the poor activity. However, the ONS clarified that activity would still have been "flattish" even if the impact of the weather was disregarded.