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Economy has shrunk by 0.7%

Shock today as it is announced that the economy has fallen 0.7% between April and June.

Well, after the hopes that we were finally crawling out of this recession, it seems that in the second quarter of this year the economy actually shrank by 0.7%, shocking forecasters who had expected a fall of just 0.2%, those of you with a magazine subscription to The Economist will be interested to know.

It's the biggest fall since the height of the financial crisis three years ago and it's thought to have been caused by a combination of the extra Bank Holiday for the Queen's Jubilee and the torrential rain the country has experienced.

Labour are taking this as proof that the government's methods to pull ourselves out of the economic slump are not working, though David Cameron has said that they would "redouble all our efforts to get on top of our debts, deal with our deficit, get our economy moving".

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Posted by Claire Sharp.

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