While attention falls upon Greece, Spain, Italy, Portugal and Ireland as the problem nations in Europe, the UK is not faring very well either. Recent austerity measures introduced in Britain no doubt were in part responsible for the fact that output fell for the second quarter in a row.
The Office for National Statistics reports that GDP (Gross Domestic Product) fell 0.2 per cent in the first quarter of 2012. In the last quarter of 2011 it had fallen by 0.3 per cent. In contrast many economists had been predicting slight growth of .1 per cent.
There were signficant declines in many sectors especially construction and there was also a fall in industrial output. The government's goal of reducing the deficit will recede further into the future as revenues decline.
The Bank of England claims there is a risk of further decline in the second quarter of 2012 as well. However, commentators claim the bank is unlikely to apply further stimulus measures such as quantitative easing because of worries about inflation. For more see this article.