15:49 25 July 2012
The Office for National Statistics (ONS) has confirmed of a GDP drop of 0.7% in the second quarter, meaning that the UK is sinking into a deeper recession. The unexpected news marks the longest double-dip recession on record.
To put this in perspective, the forecasted figure was a 0.2pc contraction instead of the 0.7 which was revealed this week, making it comparable with the world war 2 era finances.
This is the third successive quarter of contracting. The economy shrank by 0.3pc in the first quarter of the year, following a 0.4pc contraction in the final quarter of 2011.
In a statement the Chancellor George Osborne said: "We're dealing with our debts at home and the debt crisis abroad. We've made progress over the last two years in cutting the deficit by 25 per cent and businesses have created over 800,000 new jobs.
"But given what's happening in the world we need a relentless focus on the economy and recent announcements on infrastructure and lending show that's exactly what we're doing."
Growth is needed to boost the economy and the recent announcement of a multi-billion pound rail contract should help over the coming years as well as creating nearly 1000 jobs in the process.
The poor figures received in relation to the GDP are due to a variety of factors but the poor weather (which means people stay in for cheap days and nights instead of spending) and extra day of bank holiday for the Queen's Diamond Jubilee have dealt another blow, economists suggest.
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