Osborne "will not be blown off course by bad weather" as economy contracts by 0.5%

By Jonathan Isaby

GDP figures just out from the Office for National Statistics this morning revealed that the UK economy contracted by 0.5% between October and December 2010, ending a year of growth.

Most forecasts has been predicting growth of around 0.5%.

The snowy weather in December looks as if it will have had an impact on the figures and doubtless there will be many explanations during the course of the day.

In fact, Chancellor George Osborne has just issued the following statement reaction to the figures:

“These are obviously disappointing numbers, but the ONS has made it very clear that the fall in GDP was driven by the terrible weather in December.

“We have had the coldest weather since records began in 1910 and this has clearly had a much bigger impact on the economy than anyone forecast.  It’s notable that sectors of the economy that are less affected by the poor weather, such as manufacturing, continue to perform strongly, helping to rebalance our economy.

“However, it would be disastrous to change a fiscal plan that has established international credibility on the back of one very cold month. That would plunge Britain back into a financial crisis. We will not be blown off course by bad weather."