UK economy contracts 1.5%

The UK economy shrank 1.5 percent in the first quarter as the recession increasingly resembled the one that started in 1979 when Margaret Thatcher took power, the National Institute of Economic and Social Research (NIESR) said.

The drop in gross domestic product followed a 1.6 percent decline in the last three months of 2008, NIESR, whose clients include the UK Treasury, said in London yesterday. Consumer confidence last month matched the lowest level in at least four years, Nationwide Building Society said in a separate report.

Unemployment is rising at the fastest pace in three decades, pushing Prime Minister Gordon Brown to redouble his efforts to revive economic growth before the next election. The Bank of England will probably keep the benchmark interest rate unchanged at a three-century low of 0.5 percent in its monthly decision today.