U.K. Economy Shrinks Faster Than Expected

LONDON, April 24 -- Britain's economy shrank at a worse-than-expected rate in the past six months, raising new doubts about Prime Minister Gordon Brown's forecast of a relatively swift recovery from recession.

The nation'sgross domestic product shrank by 1.9 percent in the first quarter of 2009, following a 1.6 percent drop in the previous three months, according to preliminary data released Friday by the Office for National Statistics.

That contraction, the most severe since the statistics office started collecting data in 1948, gave new ammunition to political opponents and economists who say Brown's prediction of a return to economic growth before the end of this year is unrealistic.

"It's wishful thinking," said Benjamin Williamson, economist at the Center for Economic and Business Research in London.

The new GDP figures mean that the government will probably have to borrow even more than the vast amounts announced this week to fund its ambitious recovery plan, analysts said.

That massive borrowing -- already more than $1 trillion over the next five years -- has caused a storm of criticism from opposition leaders who say it will saddle Britain with a "decade of debt."

Critics note that Britain has Europe's second-largest government deficit as a percentage of GDP -- better only than Ireland, and roughly the same as Romania, according to European Union statistics.

"There is not one other major country in the world in a position as bad as the United Kingdom," David Cameron, leader of the Conservative Party, said Wednesday.

On Friday, George Osborne, the Conservatives' spokesman on financial matters, said the new GDP figures expose the "fantasy forecasts on which the government's whole plan for recovery is based."

Alistair Darling, Brown's chancellor of the exchequer, or finance minister, defended his economic projections, which had been widely attacked since he announced them 48 hours earlier.

"I've said for some time that I thought that the end of last year, the beginning of this year would show quite a sharp contraction, because there's no doubt that economies all over the world were really hit at that time," Darling told the BBC. "I believe that our economy will start to grow towards the end of this year."

Darling said that the borrowing, which would raise public debt to 79 percent of GDP by 2013, was necessary to create jobs, stimulate environmentally friendly industries, build homes and protect businesses.