Double Trouble

Austerity has not saved the British economy, it seems: the UK enters a double-dip recession:

The Office for National Statistics said Britain's gross domestic product fell 0.2 percent in the first quarter of 2012 after contracting by 0.3 percent at the end of 2011, confounding forecasts for 0.1 percent growth.

Most economists had expected Britain's $2.4 trillion economy to eke out modest growth in the early 2012, but these forecasts were upset by the biggest fall in construction output in three years coupled with anaemic service sector growth and a fall in industrial output.

Wednesday's figures will be a deep blow for Britain's Conservative / Liberal Democrat coalition, which has slid in opinion polls since a poorly received annual budget statement in March and risks embarrassment at local elections on May 3.

The government is also under pressure over revelations about its close relationship with media tycoon Rupert Murdoch.

The government desperately needs growth to achieve its overriding goal of eliminating Britain's large budget deficit over the next five years.