Economy shrinking at its fastest rate in 50 years

Figures from the Office for National Statistics show the UK economy shrank by 2.44 per cent in the first quarter of 2009 – the fastest rate in more than 50 years, and much worse than expected. Gross domestic product has fallen 4.9 per cent in year on year figures – the largest drop on record.

In related news the Organisation for Economic Cooperation and Development has told the government to cut its budget deficit by a larger amount than it currently intends, or it will face major problems in the coming years. The OECD said that Britain’s deficit would climb to 90 per cent of economic output – much higher than the 80 per cent projected by the Treasury in the Budget – and in order to maintain the economy the government should target ‘more ambitious’ budget cut backs, rather than raising tax.