UK GDP figures due amid triple-dip recession fears

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Media caption,

Steph McGovern explains how GDP works, and what another dip means

Official figures due to be released later will reveal whether the UK has slipped into a triple-dip recession.

The Office for National Statistics will issue its preliminary estimates for gross domestic product (GDP) for the first three months of the year.

The economy shrank in the last quarter of 2012. A second quarter of contraction would put the UK economy back in recession.

But on average, economists are forecasting growth of 0.1%.

A poll of analysts by Reuters resulted in forecasts ranging between a contraction of 0.2% and growth of 0.3%.

A contraction would mean the UK has fallen into recession for the third time since the financial crisis struck in 2008.

Economists say news of another recession may have a psychological impact on consumers and businesses, but they argue that the broader picture of the economy will remain unchanged.

The UK has flat-lined since 2008, and small levels of growth or contraction will have little impact on that general trend.

They also express caution about reading too much into the preliminary ONS figures, which are likely to be revised at a later date.

The UK's continued weak economic growth has been blamed on lacklustre consumer spending, continued problems in the eurozone - a major export market - and the impact of the government's austerity measures.

On Wednesday, the Bank of England announced an expansion of its Funding for Lending Scheme (FLS), designed to help small businesses get loans.

Continued weak growth is likely to increase pressure on Chancellor George Osborne, who is already facing calls from the International Monetary Fund (IMF) to rethink the pace of his austerity programme.

Poor growth has already encouraged two international rating agencies to strip the UK of its triple-A rating.

Shadow financial secretary to the Treasury, Chris Leslie, said that even if the UK escaped a triple-dip recession, low growth "isn't good enough".

"After nearly three years of flat-lining, we need to see decisive evidence that a strong and sustained recovery is finally under way," he said.

The government insists its austerity measures are vital to bringing down government borrowing, and guarantee growth in the long-term.

The ONS is due to publish the GDP estimates at 0930 BST.