Hotel and restaurant output fell dramatically in last quarter

A drop in output from hotels and restaurants contributed to a shock 0.5% contraction in the UK economy in the fourth quarter of 2010, official figures revealed today.

Gross Domestic Product (GDP) decreased by 0.5% in the last three months of 2010 compared with an increase of 0.7% in the previous quarter, the Office for National Statistics (ONS) said.

Distribution, hotels and restaurants decreased by 0.5% compared with an increase of 0.8% in the previous quarter, with hospitality contributing most to the decline in this quarter.

However, even without the impact of the snow, there was likely to have been little, if any, growth during the quarter, the ONS suggested.

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By Daniel Thomas