Yep, it’s perhaps one of the worst kept secrets since it was rumoured that Barack Obama might be the next president of the US, but the UK is officially now in recession. Here’s an extract from a Guardian article published this morning.

The UK economy contracted by a worse-than-expected 1.5% between October and December from the previous quarter, beating the quarterly declines seen during the 1990s recession, figures from the Office for National Statistics showed today. This followed a 0.6% slump in the third quarter. Two or more consecutive quarters of contraction are regarded as a recession.

The fall in fourth-quarter GDP was the biggest since the second quarter of 1980, the year of the Bristol riots, the Iranian embassy siege and British Leyland’s launch of the Metro.

Alan Clarke of BNP Paribas believes that the UK is not even half-way through the downturn yet, and predicted that GDP will continue to shrink through 2009.

“It’s a case of two quarters down, four to go,” Clarke said. “All the indications are that this recession is worse than the one of the early 1990s.”

It’s set to be a tough time with plenty of worry about job security and the cost of living, so make sure your finances are in the best possible order. The easiest thing you can do is maintain a budget. Check out our free budget calculator service. It doesn’t take long to get started and can really help put you in control of your wonga.

This entry was posted on Friday, January 23rd, 2009 at 1:04 pm and is filed under Budgeting, Credit crunch, General.