UK slips into 1st recession in 17 years

The British economy officially slipped into a recession in the quarter ended December, as credit markets seized up in the wake of the housing meltdown, leading to contraction in manufacturing as well as services industries. GDP shrank by 1.5% in the final three months of 2008, the Office for National Statistics reported. The figure was weaker than the 1.2% decline that economists on average were expecting. The economic contraction follows a decline of 0.6% in the quarter ended September, meeting a widely used definition of a recession as two successive quarters of shrinking GDP. This is Britain's first recession since 1991. It was the worst performance since the second quarter of 1980, when the country was in the middle of steep downturn. On an annual basis, UK's fourth-quarter GDP shrank 1.8% following a 0.3% year-on-year rise in the third quarter. In the whole of 2008, the British economy grew by just 0.7%, the weakest annual performance since 1992.