The United Kingdom Gross Domestic Product fell by more than expected in the fourth quarter of 2008 and signaled that the UK economy has entered into recession according to a report by the Office of National Statistics today. The UK preliminary estimate showed that quarterly GDP fell by 1.5 percent in the October through December quarter of 2008 following a decline of 0.6 percent in the third quarter.

Today \ 's GDP release brought the UK economy into its first recession since 1991 and the fourth quarter GDP decline marked the sharpest quarterly fall in GDP since the second quarter of 1980th The generally accepted definition of a recession is negative GDP growth for two consecutive quarters and the UK

joins other major economies such as the US and the Euro zone in recession. On an annual basis, the fourth quarter GDP fell by 8.1 percent from the level of the fourth quarter of 2007 and follows the third quarter annual decline of 0.3 percent. Today \ 's data surpassed economic forecasts which were expecting the quarterly GDP to decline by 1.2 percent and the annual GDP rate to fall by percent 1.4.

Contributing to the contraction in GDP was a decline of total production output in the fourth quarter by 3.9 percent after falling by 1.4 percent in the third quarter. Manufacturing declined by 4.6 percent for the quarter after falling by 1.6 percent in the third quarter. Construction activity fell by 1.1 percent after falling just 0.2 percent in the third quarter and total services saw a decline by 1.0 percent in the fourth quarter, doubling the 0.5 percent decline in the third quarter.

UK retail sales gain in December to beat forecasts.

Retail Sales data was also released today out of the United Kingdom and showed that retail sales rose much more than expected in December. The UK retail sales data, released by National Statistics, increased by 1.6 in December percent following an increase of 0.3 percent in November. On an annual basis, retail sales increased by 4.0 percent over the December 2007 time period following a 1.3 percent annual gain in revised November. Today \ 's sales surpassed market forecasts data by much more than expected as forecasts were predicting that sales would fall by 0.7 percent in December to register for annual percent increase of only 1.5.

The non-seasonally adjusted data showed a 1.8 percent annual gain for retail sales in December compared to December 2007. Contributing to the increase in retail sales was a non-seasonally adjusted gain of 2.4 percent in non-food stores and a non-seasonally adjusted increase of 18.7 percent of sales in the non-store retailing and repair sector. The Office for National Statistics cautioned that the non-seasonally adjusted data may be more representive of the actual statistics because special circumstances such as a late five-week reporting period, deep discounts and a Christmas VAT change may skew the seasonally adjusted data.

British Pound Sterling mixed versus majors in Forex Trading.

The British pound has been mixed today in forex trading against the other major currencies as the pound saw some early declines but has been trading higher into the U.S. afternoon trading session. The pound is lower versus the U.S. dollar today as the GBP / USD trades at the exchange rate of 1.3701 at 1:03 pm EST after opening the day at 1.3752 (00:00 GMT) and making an intraday low of 1.3503.

The euro is trading slightly higher today versus the pound as the EUR / GBP trades at 0.9424 after opening the day at 0.9408. The pound has declined versus the Swiss franc as the GBP / CHF has covered approximately 45 pips from its opening rate of 1.5927 to 1.5890 trading at.

The pound, meanwhile, is trading slightly lower against the Japanese yen today with the GBP / JPY falling to 121.87 from trading at 121.69. Against the Canadian dollar, the pound has 1.7283 from the opening rate to trading at the exchange rate of CAD 1.6995 per GBP fall.