FTSE 100 falls on new economic figures

The FTSE 100 has tumbled today (June 28th) as new figures reveal the economy shrank by more than originally thought.

According to the Office for National Statistics (ONS), the UK contracted by 0.4 per cent in the final three months of 2011, compared with a previous estimate of 0.3 per cent.

Data for the first three months of 2012 remains unchanged, with the economy shrinking by 0.3 per cent over this period.

This latest review shows the recession has been deeper than previously believed, with this level of downturn defined by two consecutive quarters of economic contractions.

Some analysts believe that in light of these new figures, the Bank of England will restart its programme of quantitative easing, a system that aims to boost lending by buying government debt and thus injecting cash into the economy.

At 16:45 BST, the FTSE 100 was down 0.8 per cent to 5477.5 points and the pound lost 0.3 per cent in forex trading against the dollar, with £1 buying $1.55.