Osborne defends government's deficit reduction plan

Chancellor George Osborne has defended his approach to the economy following news that the UK economy shrank at the end of 2012.

In an interview with BBC Economics Editor Stephanie Flanders he said that "we have the right deficit reduction plan".

The UK economy shrank by 0.3% in the last three months of 2012, further fuelling fears that the economy could re-enter recession.

The Office for National Statistics (ONS) said the fall in output was largely due to a drop in mining and quarrying, after maintenance delays at the UK's largest North Sea oil field.