According to the Office for National Statistics, UK GDP shrank by 0.3% in Q4, worse than the previous estimate of a 0.2% drop.
The data strengthens the case for the Bank of England to maintain asset purchases to give the UK’s ailing economy a much needed boost and prevent a technical recession.
The ONS said the fourth quarter fall in GDP was largely driven by the biggest drop in business investment for a year, which Chancellor George Osborne moved to rectify in last week’s ‘business friendly’ Budget.
In total the UK economy grew 0.7% for the whole of 2011.
“This downward revision was driven by the output measure, with additional weakness in the transport and communications sector, and the financial services sector, which was partly offset by some additional strength from the health services sector,” said the ONS.
This marks a sharp reversal in economic growth from the third quarter of 2011, when GDP grew by 0.6%.
Bank of England governor Sir Mervyn King warned earlier this year the economy is likely to zig-zag in 2012.
