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UK household spending in recession
Business digest: Household spending has fallen for two consecutive quarters
Household spending shrunk for a second quarter in a row, new figures from the Office of National Statistics reveal. Household expenditure contracted 0.6 per cent in the first three months of 2011, following a 0.3 per cent fall in the last quarter of 2010.
More bad news came in the form of lower business investment, one of two key pillars of recovery pinpointed by the coalition. Despite companies sitting on a record £71bn pile of cash, business investment is now down 3.2 per cent on last year.
Graeme Leach, chief economist at the Institute of Directors, said: "With domestic demand, consumer spending and business investment down in the first quarter, net trade is the only area of growth, but that is unsustainable.
"GDP growth this year could well undershoot the IoD's already pessimistic forecast of 1.2 per cent."
Read the full story at the Daily Telegraph. ·
