25 January 2012 Last updated at 05:21 ET

Economy tracker

UK economic activity shrank by 0.2% in the last three months of last year, according to official figures.

WHAT IS GDP?

Gross domestic product
A measure of a country's economic activity, namely of all the services and goods produced in a year

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It marks a sharp drop in economic activity from the third quarter of 2011, when gross domestic product (GDP) expanded by 0.6%.

The figures, from the Office for National Statistics (ONS), are a preliminary estimate, which could be revised either up or down by 0.2%.

The ONS figures also show that the economy grew by 0.9% during 2011.

The quarterly fall in GDP is the first since the last three months of 2010, when freezing weather was blamed for a 0.5% drop.

The new figure was worse than had been feared, as most economists had pencilled in a 0.1% fall in activity.

The contraction was driven by a 0.9% fall in manufacturing, a 4.1% drop in electricity and gas production as the warm weather caused people to turn down heating, and a 0.5% fall in construction sector.

Meanwhile, the services sector, which accounts for two thirds of the economy, ground to a halt.

November's public sector strikes, which took place in the fourth quarter period, losing nearly a million working days, may also have held the economy back.