<p><br /> The economic recovery in the UK has been dealt a blow as the latest growth figures show a decline towards the end of last year.<br /> </p><p><br /> Gross Domestic Product (GDP) dropped by 0.5 per cent in the fourth quarter of 2010, raising fears of a double-dip recession.<br /> </p><p><br /> The severe winter weather is being mostly blamed for the plunge between October and December, according to the Office for National Statistics (ONS).<br /> </p><p><br /> The dramatic contraction in GDP could seriously damage prospects for the economy over the next year, as Chancellor George Osborne rolls out his £81 billion package of spending cuts - which include hundreds of thousands of public sector job losses.<br /> </p><p><br /> In light of the latest statistics, the Chancellor remained defiant.<br /> </p><p><br /> He said: "These are obviously disappointing numbers, but the ONS has made it very clear that the fall in GDP was driven by the terrible weather in December.<br /> </p><p><br /> "We have had the coldest weather since records began in 1910 and this has clearly had a much bigger impact on the economy than anyone expected.<br /> </p><p><br /> "It's notable that sectors of the economy that are less affected by the poor weather, such as manufacturing, continue to perform strongly, helping to rebalance our economy."<br /> </p><p><br /> Alarm bells over the impact of Arctic conditions last month have been ringing throughout January, as retailers, housebuilders and transport firms revealed a slump in activity as the big freeze took hold.<br /> </p><p><br /> Last week, the ONS revealed that retail sales in the UK suffered the worst December on record as the high street battled with freezing temperatures and heavy snowfall.<br /> </p><p><br /> The construction blip - which boosted growth in the second and third quarter of 2010 - ended in the fourth quarter - with construction output plummeting 3.3 per cent. There was some reprieve for manufacturing, as production output rose 0.9 per cent in the quarter.<br /> </p><p><br /> Bank of England Governor Mervyn King is expected to discuss his concerns over inflation in a speech in Newcastle this evening.<br /> </p>
