UK economy slumps more than expected; slips 0.6% in Dec qtr

The British economy contracted more than expected at 0.6 per cent in the last three months of 2010, bogged down by poor performance of construction and services sectors.
    
The UK, which has embarked on significant austerity measures, continues to grapple with sluggish economic situation even as European giants, including Germany and France, have registered relatively better quarterly growth.
    
"Gross domestic product contracted by 0.6 per cent in the fourth quarter of 2010, revised down from the previously estimated fall of 0.5 per cent.
    
"GDP in the fourth quarter of 2010 is now 1.5 per cent higher than the fourth quarter of 2009," UK's Office for National Statistics said in a statement today.
    
In the three months ended September 2010, the national economy had expanded 0.7 per cent.
    
The economic contraction in the December quarter was mainly triggered by sharp declines in output of construction and services industries.
    
As per the revised estimates, construction output slumped 2.5 per cent in the December quarter, while that from services sector dropped 0.7 per cent.
    
"In the fourth quarter of 2010, the trade deficit in real terms increased to 10.2 billion pounds from 9.3 billion pounds," the statement said.
    
To boost the country's financial situation, the UK government has resorted to severe austerity measures including spending cuts.
    
Meanwhile, the 16-nation euro zone economies grew 0.3 per cent in the December quarter. During the same period, German and French economies grew 0.4 per cent and 0.3 per cent, respectively.