UK GDP shrinks in Q4

The UK economy shrank in the fourth quarter as companies scaled back investment, underlining the risks to a recovery that Bank of England Governor Mervyn King says will be “slow and uncertain.”

Gross domestic product dropped 0.2 per cent from the third quarter, the same as previously estimated, the Office for National Statistics said in London on Friday. Economist predicted no revision, according to the median of 36 forecasts in a Bloomberg survey. Business investment fell 5.6 per cent, the most since the first quarter of 2011.

While optimism is growing that Britain will avoid recession, King said on February 15 the central bank was ready to expand stimulus further if needed to aid an economy facing “substantial headwinds.”