U.K. Contracts More than Estimated

Britain's economy has shrunk more than expected. The last three months of 2008 have registered the slowest growth since 1980.U.K's Economy has shrunk 1.6%, more than the estimated 1.5% in the last year.In Online forex trading pound dropped against the U.S. dollar.

In the last quarter of the previous financial year U.K's GDP has contracted by 2% in stead of the 1.9% calculated.

On the whole, analysts are only expecting the economy to shrink further in 2009.Among important figures is the household expenditure which fell by 1%. All other major sectors have also recorded contraction.The drastic fall in the output in the construction sector is being seen as the prime reason behind the slump. Output in the construction sector fell by 4.9% in the last year.

The savings ration has increased by at least 5% with more people putting aside the money for hard times.Unemployment in the U.K. has been on the rise since the beginning of the year.

Economists are citing the rise in savings as a good sign."It means that a large portion of the necessary re balancing of the economy away from spending and towards saving has occurred already", pointed out an economist.