By Marcus Leach

Official figures released today (Friday) gave fresh concern to fears of a triple dip recession, as they showed that the UK's economy contracted by 0.3% in the final quarter of 2012.

The Office for National Statistics' data shows that output shrank following 1% growth in the third quarter, although this was considered to be artificially skewed by the Olympics.

The latest figure was dragged down by a sharp contraction of 1.8% in manufacturing, whilst the service sector was flat. However, there was a more positive outlook for construction which saw output rise by 0.3%, compared with a decrease of 2.5% between the second and third quarters.

Chancellor George Osborne has said UK spending cuts must continue if the government is to retain credibility.

“After a difficult year, the UK economy has ended on a disappointing note," John Cridland, CBI Director-General, said.

“We think growth will continue to be fairly flat through the winter but momentum will gradually build later in the year, as the global economy picks up a little and confidence lifts.”

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