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Austerity-hampered UK economy shrunk more than estimated

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It can't be stressed enough that the Republican plans for austerity in the US would destroy an already weak recovery. The Democrats really need to push back with modern examples of how bad austerity is hurting the tanking economies in Europe, especially the UK.

Stimulus spending can't go on forever, but not spending will have damaging consequences. Bloomberg:

The U.K. economy shrank more than initially estimated in the first quarter after construction was revised to show a deeper slump, which may bolster the case for the Bank of England to restart bond purchases.

Gross domestic product fell 0.3 percent, compared with a 0.2 percent decline estimated last month, the Office for National Statistics said today in London. Construction output fell 4.8 percent, the most in three years and more than the 3 percent initially estimated, while services and production were unrevised. Net trade and inventories subtracted from GDP.

The Bank of England’s decision to stop expanding stimulus this month was “finely balanced,” it said yesterday, amid growing threats from the euro-area debt crisis. With the economy facing additional headwinds from the government’s spending cuts, the International Monetary Fund said this week that the U.K. needs more monetary easing and fiscal stimulus to stoke growth.

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