UK back in recession after 0.2 pct Q1 contraction

Britain's economy has fallen back into recession for the first time since 2009 after official figures Wednesday showed that it unexpectedly contracted during the first three months of the year. The Office for National Statistics said economic output as measured by gross domestic product fell by 0.2 percent in the first three months of the year from the previous quarter. The first quarter drop follows the 0.3 percent decline recorded in the last quarter of 2011 and means Britain has returned to recession — two consecutive quarters of negative growth are required for a country to be officially deemed to be in recession. The first quarter decline was unexpected — the consensus in the markets was that the British economy eked out growth, albeit of a modest 0.1 percent. "The government and the Bank of England needed a sharp shock. They just got it," said Marcus Bullus, trading director at MB Capital in London. Treasury chief George Osborne said the debt crisis afflicting the 17-country eurozone has impeded Britain's recovery, but he said he would stick to his "credible plan" to cut the country's budget deficit. A more detailed look at the first quarter figures showed that a 0.1 percent in Britain's big services sector was not enough to offset a 3 percent in construction and a 0.4 percent in production industries including manufacturing and energy production.