Osborne vows he won’t run from triple dip recession

British finance minister George Osborne vowed not to “run away” from Britain’s economic woes last night amid fresh signs Britain is heading for an unprecedented triple dip recession.

The first official estimate from the Office for National Statistics (ONS) revealed the economy shrank by 0.3% between October and December, slamming the recovery into reverse after the 0.9% growth seen in the previous quarter.

Figures also showed the economy flatlined in 2012 as a whole and experts predict it will not regain its peak level for another two years.

Pressure is now intensifying on Mr Osborne to do more to jump start the ailing economy in his March budget.

Accused by Labour of being “asleep at the wheel”, he is facing increasing criticism over his austerity programme and as Britain risks losing its coveted AAA rating after all three major ratings agencies put the country on negative outlook.

Olivier Blanchard, chief economist at the International Monetary Fund, suggested earlier this week that Mr Osborne should slow down his spending cuts, saying now was a “good time to take stock”.

His comments came as the IMF slashed the UK’s growth outlook to 1% in 2013.

GDP — a broad measure for the total economy — would have to contract again this quarter for the UK to be back in recession, but hopes of a rebound are starting to fade after a snow-hit start to 2013.

Mr Osborne said: “We have a reminder today that Britain faces a very difficult economic situation.

“A reminder that last year was particularly difficult, that we face problems at home because of the debts built up over many years, and problems abroad with the eurozone, where we export most of our products, in recession.

“Now, we can either run away from those problems or we can confront them, and I am determined to confront them so that we can go on creating jobs for the people of this country.”

While the figures are preliminary estimates and subject to revision, they have dealt a blow to recovery hopes after the UK bounced back from the longest double-dip recession since the 1950s in the third quarter.

And last week’s snow “rings alarm bells” for the current quarter, according to Andrew Goodwin, senior economic adviser to the Ernst & Young Item Club.

GDP suffered contractions at the start of 2012 and end of 2010 during snow disruption and the recent adverse weather is estimated to have cost the economy more than £500m (€586m) a day.

But Chris Williamson, chief economist at Markit, said the fourth quarter GDP blow banged “another nail in the coffin” of the UK’s AAA rating.