Shrinking economy

The British economy took a step backwards in a shock report which saw a 0.5% contraction in the last quarter of 2010.

The Office for National Statistics (ONS) said bad weather and a difficult period in the construction industry were primarily responsible for the setback.

But the news will spark political fears of a double-dip recession - which would take place if the first three months of 2010 see a second consecutive quarter of negative growth.

Sterling fell dramatically following the news.

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