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The UK is back in recession, says OECD

The UK is back in recession with negative growth expected in Q1 2012, the Organisation for Economic Co-operation and Development claims.

In its interim economic assessment releasd today the think tank says it expects the UK economy to shrink by 0.1% in Q1 2012, or 0.4% year on year.

It follows a drop of 0.3% in GDP in Q4 2011 meaning the UK will have suffered two quarters of falling output, the most widely accepted definition for a recession.

The OECD expects UK growth to rebound by 0.5% in Q2.

Japan and the United States are both expected to see strong growth in Q1 of 3.4% and 2.9% respectively.

Eurozone countries are faring worse with only Germany seeing growth of 0.1% in the first quarter while Italy’s economy will shrink by 1.6% and France’s output will fall by 0.2%.

The report states: “The situation for the three largest euro area countries in aggregate is expected to remain fragile, with negative growth projected for the first quarter of 2012 and a moderate rebound in the second quarter.

“Recent positive indicators suggest that activity in Germany may accelerate through the first half of the year. Activity in France is projected to be broadly flat. In Italy weak industrial production and household sentiment are suggestive of recession for the first two quarters of the year. That said, the most recent indicators have been more positive, resulting in slightly better projected growth for the second quarter.”

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