With a sharp fall in construction to blame for the contraction in the economy, the Office for National Statistics has said we have entered a double dip recession. The economy shrunk by 0.3% in the final quarter of 2011 and 0.2% in the first quarter of 2012.
BBC economics editor Stephanie Flanders says it "adds to the picture that the economy is bumping along the bottom". The figure is an early estimate and will have further revisions in the coming months with David Cameron saying the figures were “very, very disappointing”.
He commented "I don't seek to excuse them, I don't seek to try to explain them away," he said at Prime Minister's Questions. "There is no complacency at all in this government in dealing with what is a very tough situation, which frankly has just got tougher."
The huge cuts in public spending (25%) in public sector housing and 24% in public non-housing with further cuts expected in 2013 there is a big hole to fill. UKunemployment fell in the months from December to February from 8.4% to 8.3%, around 35,000.
Mike Fetters of TotalJobs, however, find the figures by the ONS deceiving. He highlighted that "Whilst on the surface they look rosier than those of the past few months, they hide a number of concerns - not least the staggeringly high levels of underemployment - and they don't take into account news from the last couple of months."
With the class of 2012 set to graduate in the summer, the contraction in the economy may mean many graduate employers start to freeze their recruitment plans in preparation for the double dip recession. Graduates will have to apply earlier to graduate jobs in a bid to secure a job upon leaving university. Yet the worry is that many new graduates will add to the others that are already unemployed or underemployed.