THE ECONOMY is likely to have shrunk in the final three months of 2012, economists warned ahead of the official data’s publication this Friday, with industrial production falling and the dominant services sector flat.
And the expected rebound in the first quarter – continuing the economy’s zig-zag pattern – could be squashed by the snow, pushing down output again and tipping the UK back into recession.
“Erratic factors continue to plague the growth figures: The unwinding Olympics effect probably subtracted 0.3 percentage points from fourth quarter growth,” said Berenberg Bank economist Robert Wood.
“Weak extraction output as oil rigs were shut for maintenance probably took another 0.2pp off.”
And BNP Paribas’ Ken Wattret warned the snow could cause a triple dip recession.
“With the UK entering a big freeze, there is a possibility that something akin to last year’s situation could happen again, with a weather-related fall in output in the first quarter, meaning the UK could enter a technical recession, albeit for erratic reasons.”