In stark confirmation that Britain is in the grip of recession, government statistics released today showed that economic growth fell by 1.2% in the third quarter, the biggest fall since 1980.
The decline in the gross domestic product, which measured the total value of goods and services produced in the three months to September, contrasted with a 0.4% rise in the second quarter.
The decline offered no solace to Prime Minister John Major, who is struggling to find a remedy for Britain’s high 9.7% inflation rate. The Conservative government’s high-interest-rate policy has brought unemployment and bankruptcy to some companies.
On the day after the United States cut its key discount rate from 7% to 6.5% in a bid to stimulate its flagging economy, the weak British figures increased pressure on Major’s government for an early cut in interest rates.