Reaction: UK in double-dip recession This also presents a significant problem for the Bank. All indications were that they would not authorise more QE at the May meeting, but today's figures have thrown them a real curve ball. We suspect that they will stick to their guns, in the belief that conditions are much stronger than the ONS suggests, but that may be a difficult stance to communicate. Alan Clarke, Scotiabank: Disappointing, we knew it's possible we'd see a negative number, but not for the reason the GDP numbers have shown. In particular, that services have contributed the bulk of the disappointment is worrying. I think we are in good company. When the eurozone figures are relased in a few weeks' time, it will show that the UK has not fared worse than the likes of Germany and France. Also the UK was in the eye of the storm around the end of 2011-the beginning of 2012 when confidence was still recovering from the euro crisis and inflation was hurting consumer spending. Both of these headwinds have faded since then, so there should be better news for growth ahead. But that is obviously form a disappointing starting point. The Bank (of England) minutes stressed that underlying GDP growth was respectable. However, these figures show even more dissapointing underlying growth than we feared. So the door is still open for more QE. Alex Lawson, Moneycorp: The UK economy has now failed to grow at all over the past twelve months, leaving the earlier expectations of a 0.3% annual rate of growth looking fanciful. The pound was already falling in advance of these numbers as investors prepared for bad news. It may now have further to fall, although the initial reaction has been muted. The reason is that the GDP data conflicts with recent improving economic statistics and may be somewhat discounted as a result. With the eurozone debt crisis still alive and well, and concerns about French economic policy should Francois Hollande become President, there is still scope for the pound to post further gains versus the euro in coming weeks. Andrew Smith, KPMG: It's official, we're in a double-dip. The 0.2 percent fall in GDP in the first quarter, coming on the back of the 0.3 percent decline at the end of last year, confirms that the UK moved back into technical recession over the winter. But worse, output remains broadly unchanged from its level in the third quarter of 2010 and, four years on from its pre-recession peak is still some 4 percent down- making this slump longer than the 1930s Depression. Looking ahead, output is expected to remain weak in the second quarter and with extra holidays, the Jubilee and the Olympic Games distorting the picture over the summer it will be some time before the underlying picture is clear. But even if activity recovers in the second half, overall this looks like being - at best - another year of weak growth, held back by squeezed real incomes and public spending cuts. Recovery postponed (again). Simon Rawlinson, EC Harris: The latest GDP figures are clearly very disappointing. Construction was -3% for Q1 2012 and coupled with a revised figure of -2% for Q4 2011 means that the industry has contracted by 5% over the last half year. We have effectively lost the gains that were made in 2011 and repeated the pattern of 2010 when we saw a loss of 9.3% over a six month period. Most of the damage was down to poor performance during December and January, which is also a recurring trend to the previous year, when after a poor Q4 and Q1, the rest of the year we played catch up. Whilst it is impossible to say exactly where the drop has come from, if you look at the last construction output data, infrastructure was the only area that showed growth, with everything else static or falling. It is likely that the public sector spending cuts are reflected in this figure however. Marchel Alexandrovich, Jeffries International: I am not sure it has changed a lot of people's minds about what the Bank (of England) is going to do next. The numbers are not too different from what they were expecting, all things being equal. They will probably pause (on QE) and despite this weak number, I think they will look through it and look at the UK economy as stagnating but not as weak as the headline numbers suggest, because part of that weakness was due to a fall in output in construction which was weak in Q1 but could probably bounce back stronger in Q2. Vicky Redwood, Capital Economics: The UK's back in recession. The 0.2 percent contraction in GDP in Q1 contrasted with expectations for a small gain and meant that output dropped by 0.5 percent over Q4 and Q1 together. Admittedly, the fall was driven by a sharp fall in construction output and there are question marks over the reliability of these numbers. The main disappointment was the meagre 0.1 percent rise in services output in Q1 - the surveys had pointed to services growth of 0.5 percent or more. Admittedly, the MPC indicated at its recent meeting that it will be putting greater weight on the more upbeat business surveys. Indeed, we remain comfortable with our view that GDP will contract by about 0.5 percent this year. Chris Williamson, Markit: The underlying strength of the economy is probably much more robust than these data suggest. The danger is that these gloomy data deliver a fatal blow to the fragile revival of consumer and business confidence seen so far this year, harming the recovery and even sending the country back into a real recession. Not for the first time, the official data and survey data are sending conflicting signals...The disappointing GDP data also contrast with other official data, which indicate that retail sales grew 0.8 percent in the first three months of the year and the labour market to have shown some signs of improvement.