GDP Figures: Experts Predict Contraction

Figures showing whether Britain is heading for an unprecedented triple-dip recession will be unveiled later.

Some experts believe gross domestic product (GDP) will have fallen by 0.1% in the final quarter of 2012.

If the economy then contracts in this quarter the nation would be officially back in recession.

Hopes of a rebound are fading after a snow-hit start to 2013, which some estimate cost Britain more than £500m-a-day in lost output.

A fourth-quarter downturn would be a sharp reversal of the 0.9% recovery seen in the third quarter, when output was fuelled by one-off factors such as the Olympics and as the economy clawed back activity lost during the Queen's Diamond Jubilee holiday.

Bank of England governor Sir Mervyn King has predicted a weaker quarter

Bank of England governor Sir Mervyn King has already warned that the quarter would be "considerably weaker", while the IMF believes the UK contracted by 0.2% overall in 2012.

It also expects expansion of just 1% during this year.

Today's figures from the Office for National Statistics (ONS) represent the initial estimate of GDP and are subject to revision over subsequent months.

But the run of gloomy economic indicators increases the threat to the UK's prized AAA rating, with all three major ratings agencies placing the country on negative outlook.

Chris Williamson, chief economist at Markit, said the AAA threat will "intensify significantly" if figures confirm a contraction at the end of last year.

The CEBR economic consultancy believes the economy may have contracted by as much as 0.5% in the final quarter of 2012 and by 0.1% over the whole year.

Construction has so far been the only bright spot, according to recent industry surveys, with activity surging to a 15-month high in December.

But it accounts for only 10% of the economy and the far bigger services sector has not fared so well.

The first official estimate of fourth-quarter GDP will not include overall household consumer spending figures, which will be taken into account in the second estimate.

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