Concern as the UK economy contracts by 0.3%

The fourth quarter of GDP shows the UK economy contracted by 0.3%. The economy had grown by 0.9% in Q3 but it was boosted by the Olympic games in London. The Chancellor of the Exchequer George Osborne said in response "We have a reminder today that Britain faces a very difficult economic situation. We face problems at home because of debts built up over many years & problems abroad with the Eurozone, where we export most of our products, in recession. We can run away from those problems or confront them. I'm determined to confront them so we go on creating jobs for people in this country" the Prime Minister's spokesman said "The Prime Minister's view is that we have absolutely the right economic policy."

However the Deputy Prime Minister, Nick Clegg, told the House Magazine yesterday Ministers have now "realised" that they should have been doing more to boost spending, saying "If I'm going to be sort of self–critical, there was this reduction in capital spending when we came into the Coalition Government,". He added: "I think we've all realised that you actually need, in order to foster a recovery, to try and mobilise as much public and private capital into infrastructure as possible." The Prime Minister's spokesman responded to Mr Clegg by saying 'The Prime Minister's view is that it was the right decision to make."

The Shadow Chancellor Ed Balls blasted the Prime Minister and Chancellor for having "been asleep at the wheel. They’ve spent the last six months obsessing about a referendum in five years’ time, not focussing on the problems in our economy today. And their decision in 2010 to raise taxes and cut spending further and faster choked off the recovery, as even Nick Clegg is now beginning to admit. It is grossly irresponsible and out of touch of George Osborne to once again try to shrug off bad news and refuse to heed the advice now coming to him from right, left and centre. The Chancellor should listen and act now to give direct help to struggling families and businesses. Instead, the only people he is helping are millionaires who will get a tax cut in April, on the same day that millions of working families have their tax credits cut. This kind of Tory trickle-down economics is just not going to work.

The first quarter figures for 2013 are published by the Office for National Statistics on Friday 26th April.