GDP drop even worse than expected

By Mark Ferguson / @markfergusonuk

Back in January it was revealed that GDP had fallen by 0.5% in the final quarter of 2010. George Osborne blamed the snow, but there were some suggestions that the figure might actually be revised upwards – allowing the government to claim that without the snow there would have been growth.

Any such escape route for the government was dashed today, as GDP was revised down – with a 0.6% fall in the last quarter. According to the Office for National Statistics:

“UK gross domestic product (GDP) in volume terms decreased by 0.6 per cent in the fourth quarter of 2010, revised down from a decrease of 0.5 per cent published in January.”

Construction output – hit hard by the cancellation of capital projects such as Building Schools for the Future – fell by 2.5%.

Even without the snow there was a clear decline in the UK economy at the end of last year, and that’s before the VAT rise kicked in. George Osborne has some explaining to do.