According to official figures the UK’s economy shrank by 0.5 percent between October and December of last year.
Analysts were shocked by the figure, as they had predicted growth for the economy of at least 0.3 percent in this period.
The drop is said to be driven by the cold weather that dominated the last few weeks of 2010, and affected many businesses and services during this time. It has been said that as much as four fifths of the decline in this time can be attributed to the weather.
This is the first reported shrink in the economy since the country officially came out of depression at the end of 2009, when the country’s GDP grew by 0.5 percent.
There are worries that the austerity the Government plans to put in place in the next few months, are going to further this problem and possibly push the country back into recession.
City Index analyst Joshua Raymond at City Index in London said “The GDP figure is quite simply a shock to the system and heightens fears that the coalition government’s austerity plan may well curb growth too excessively and send the UK into a double dip recession,”
Commenting on the figures, the Chancellor was defiant about the planned £81 billion spending cuts
“There is no question of changing a fiscal plan that has established international credibility on the back of one very cold month” he said.
“We will not be blown off course by bad weather.”