British economy shrinks by 0.2%

Britain’s economy may have entered a mild recession in the last three months of 2011, hampering growth and raising the chance that the Bank of England will inject more cash soon.

Britain’s recovery from the 2008/2009 recession — the deepest since the 1930s depression — has been sluggish and unemployment has hit a 17-year high as the government cuts spending to erase its budget deficit.

British Chancellor George Osborne defended the cuts.