LONDON, March 27: Britain reported its worst quarterly economic performance in nearly 30 years on Friday in a worldwide recession that is sparking stepped-up calls for tighter government controls on financial markets.

Australia and Japan underscored sweeping US proposals for stronger oversight ahead of a crisis summit next week where world leaders will try to draft new measures to tame the sharpest economic downturn since World War II.

The stiff challenge facing Group of 20 nations was made painfully clear on Friday when official data showed the British economy shrank a sharper than expected 1.6 per cent in the fourth quarter, the largest contraction since 1980 and worse than the initial reading of 1.5 per cent.

Analysts said there was worse to come for an economy that along with Japan, the United States and the eurozone is hobbled by recession.

“Worryingly, latest data and survey evidence point to (a British) GDP contraction at least matching the fourth quarter 2008 drop in the first quarter of 2009,” said Howard Archer, chief Britain economist at IHS Global Insight.

“Furthermore, the economy is clearly entering the second quarter still strongly in reverse.”

Archer added that Britain would likely “suffer a further modest overall GDP contraction of 0.3 per cent in 2010 as recovery develops very gradually.”

Official figures from France and South Korea meanwhile revealed fourth quarter slides in economic momentum but by less than the predicted margins.

But in Italy, industrial orders plunged 31 per cent in January from the same month last year, the steepest fall since 1991.

The global meltdown has been partially attributed to excessive and imprudent risk-taking by largely unregulated financial institutions, notably in the United States. In response, President Barack Obama’s administration on Thursday put forward proposals for far-reaching regulatory reform.—AFP
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