U.K. Economy Shrinks Dramatically

The U.K. economy shrank dramatically in the first quarter of 2009, reports the Office for National Statistics. Indeed, the British economy saw its biggest contraction in 50 years, with a 2.4% decline in gross domestic product. This decline was more than analysts predicted, and serves as a reminder that economic recovery in Britain is going to be a long, slow process.

Indeed, as the report was made, the Bank of England warned that prolonged economic weakness is to be expected. There were some upbeat comments, however. These comments revolved mostly around the idea that economic contraction is coming to a halt, and that at sometime expansion will begin.

As expected, the news did little to help the sterling in forex trading on the currency market.