http://www.telegraph.co.uk/finance/debt-crisis-live/9224867/Debt-crisis-UK-in-recession.html
George Osborne will be wincing this morning. Applauded internationally for his austerity programme, at home he's facing brickbats. Forget the pasties and the Granny Tax, though: Britain has double-dipped. The Chancellor’s insistence that the best stimulus he could give the country was low interest rates, driven by market confidence, has self-evidently failed. The UK is in recession again.
We cannot replace the lack of demand.
These are not abstract 'commitments' these are the bills for accomplished contracts, audited, accepted and legal. There is no option of breaking contracts.
In a rare concession, the German Chancellor admitted that austerity alone would not solve the crisis but she insisted that the wave of political opposition to fiscal discipline was wrong.
11.02 Elsewhere in Europe, Germany attempted to sell €3bn of 30-year debt this morning but couldn't find enough interested investors and only managed to shift €2.405bn. The auction saw a record low yield for that type of bond of 2.41pc.
10.45 The Daily Telegraph's economics editor, Philip Aldrick, writes thatGeorge Osborne's plan has failed:
George Osborne will be wincing this morning. Applauded internationally for his austerity programme, at home he's facing brickbats. Forget the pasties and the Granny Tax, though: Britain has double-dipped. The Chancellor’s insistence that the best stimulus he could give the country was low interest rates, driven by market confidence, has self-evidently failed. The UK is in recession again.
In defence, the Treasury will point to the bigger picture. The eurozone crisis has sapped confidence, deterring businesses from investing and costing growth and jobs.
09.40 Most economists expected Britain's economy to eke out modest growth, but these forecasts were upset by the biggest fall in construction output in three years.
The data shows output was still 4.3pc below its peak in Q1 2008, and the economy has only grown by 0.4pc since the government came to power in Q2 2010.
Output in the service sector - which makes up more than 75pc of GDP - rose by just 0.1pc in Q1. Industrial output was 0.4pc down, while construction - which accounts for less than 8pc of GDP - contracted by 3pc.
09.36 The pound has taken a dramatic slide on the news of recession. It slipped to $1.6093 in moments.
09.31 The GDP figure is out: the UK economy shrank by 0.2pc in the first quarter. That means the UK has fallen into technical recession - the feared "double-dip".
09.14 ECB boss Mario Draghi has warned this morning that commercial bank lending is likely to remain subdued "for some time". The central bank poured €1 trillion in cheap loans into Europe earlier this year, but it isn't getting through to the small businesses that can provide growth as they're too cautious to borrow, he says.
We cannot replace the lack of demand.
07.54 As Bruno Waterfield reported last week, the EC is to defy European austerity plans by demanding an increase in the EU's budget. Today those proposals will be unveiled, and the UK has been told that it must find its £900m share or face the EU Court of Justice. A senior official told The Daily Telegraph that if the UK refused to pay it would be "legally compelled":
These are not abstract 'commitments' these are the bills for accomplished contracts, audited, accepted and legal. There is no option of breaking contracts.
We could be sent to the European Court Justice if we did not repay what was legally and economically audited. There is a bill to pay and payment can be enforced.
06.20 Despite the upheaval in the Netherlands yesterday and the likely defeat of her ally Nicolas Sarkozy in the second round of the French election, Germany's Angela Merkel is still banging the drum for austerity across Europe. Louise Armitstead reports:
In a rare concession, the German Chancellor admitted that austerity alone would not solve the crisis but she insisted that the wave of political opposition to fiscal discipline was wrong.
"We're not saying that saving solves all problems," Ms Merkel said at a conference in Berlin. "[But] you can't spend more than you take in. You can't live your whole life this way. Everybody knows this."
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