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18 July 2024

UK economy shrinks 1.7%

By Reuters

Britain's economy shrank by 1.7 per cent in the three months to January, taking the level of economic activity down 3.3 per cent from its peak in April 2008, the National Institute for Economic and Social Research estimated yesterday.

NIESR's estimate came after official data showed industrial output in the three months to December fell at its fastest quarterly rate since 1974 – when energy shortages due to a coal miners' strike forced the government to impose a three-day week.

"The rate of contraction shows, so far, little sign of easing," NIESR said, adding that any early easing in the pace of contraction depended on the success of government measures to get credit flowing again.

The Bank of England published more details of its £50 billion (Dh267.9bn) Asset Purchase Facility on Friday, which allows it to buy corporate debt and help unfreeze the credit markets.