Obama Pledges To Build 'An Economy To Last'

In a speech to both houses of Congress, carried live at prime time on all of the US television networks, Mr Obama outlined the battleground for this year’s presidential election.

The address is the President's annual opportunity to outline his vision of the nation's future to the American people.

But there was a definite campaign feel about his hour-long address.

Mr Obama faces a tough battle to secure a second term in the White House and he took a direct swipe at one of his rivals for the job.

The President called on the country's richest to pay a bigger share of their income in tax - a day after Mitt Romney confirmed he paid around 15% a year.

"We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by," he said.

"Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.

"What's at stake are not Democratic values or Republican values, but American values. We have to reclaim them."

He went on to lay out what he said was a "blueprint for an economy that's built to last - an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values".

He also criticised those on Capitol Hill he believes have blocked progress.

He said: "As long as I'm President, I will work with anyone in this chamber to build on this momentum.

Mr Obama greeted congresswoman Gabrielle Giffords

"But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place."

It prompted a stinging official Republican response from Indiana Governor Mitch Daniels

He said: "No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favour with some Americans by castigating others.

"As in previous moments of national danger, we Americans are all in the same boat.

"If we drift, quarrelling and paralysed, over a Niagara of debt, we will all suffer, regardless of income, race, gender, or other category."

Mr Romney released a video called The Real State of the Union which featured him speaking in front of a banner reading: "Obama is not working."

He hit back at what Mr Obama had to say. "The real problem is that he seems to think that America is on the right track. That idea is very foreign to people here."

There was an emotional moment when Mr Obama greeted congresswoman Gabrielle Giffords, still recovering from injuries sustained in a shooting rampage last year and about to step down from Congress.

The President delivered tough words on Syria and Iran in covering a broad range of topics and paid tribute to America's armed forces.

He said: "America is back. Anyone who tells you otherwise, anyone who tells you that America is in decline or that our influence has waned, doesn’t know what they are talking about."

Mr Obama will embark on a three-day, five-state tour later to sell his message to the American people.

"Let's never forget - millions of Americans who work hard and play by the rules every day deserve a government and a financial system that do the same," he said.

"It's time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody."

Recession Looms As UK Economy Shrinks By 0.2%

It is the first quarter of negative growth for a year and the fall was slightly more than expected.

The contraction in Gross Domestic Product (the value of all goods and services produced) marks a sharp slowdown on the 0.6% rise in the previous three months of 2011, and fuels fears of a double-dip recession.

If this figure is not revised upwards and there is another contraction in the first quarter of 2012, the UK will be plunged back into recession.

Negative growth in the final three months of last year was driven by a 0.9% fall in manufacturing, a 4.1% drop in electricity and gas production as the warm weather caused people to turn down heating, and a 0.5% fall in the construction sector.

Output in the service industry remained flat and government contracts were up by 0.4%.

GDP over the whole of 2011 grew by 0.9%, compared with growth of 2.1% in 2010.

Continuing problems in the eurozone have been significantly hampering growth.

Unemployment also recently hit a 17-year high.

The fourth-quarter decline leaves Chancellor George Osborne open to fresh criticism that his austerity measures are choking off the economy.

But Mr Osborne insisted he would stick to his plans.

He added: "These are disappointing figures about what happened to the economy at the end of last year but they are not entirely unexpected because of what's happening in the world and what's happening in the eurozone crisis.

"And they are similar to what our independent forecaster predicted in November.

"Now Britain has substantial economic problems, debt built up over the past 10 years, and we are dealing with those, but the truth is that dealing with those problems is made more difficult by the situation in the eurozone."

The growth figures reinforce expectations that the Bank of England will inject more cash into the economy next month in an attempt to stimulate growth.

The bank's governor, Sir Mervyn King, has said that the UK faced an "arduous, long and uneven" road to recovery.

Mr King has so far resisted calls for another round of quantitative easing but negative growth will intensify the pressure.

James Knightley, an economist at ING Bank, said the GDP figures pointed to further economic gloom.

"Unfortunately, UK economic activity is likely to get worse before it gets better with a technical recession likely to be confirmed by GDP numbers for the first quarter of 2012.

"With such economic uncertainty, firms are reluctant to invest and hire so it is difficult to see where any growth will come from in the next couple of quarters."

But he said he is more optimistic about the second half of 2012, when falling inflation will help ease the squeeze on consumers' spending power, which has been behind much of the recent weakness in the economy.

Pressure on the BoE for another round of quantitative easing is increasing

The GDP figures follow data from the Office for National Statistics which showed that UK debt surpassed the £1trn barrier for the first time.

The International Monetary Fund has also downgraded its global outlook for growth.

The IMF's forecast for UK growth this year was cut by 1% to 0.6% - although Britain is still expected to outperform Germany and France.