That 'shocking' GDP figure explained

Not surprisingly, there's been some sharp reaction to today's news that the UK's economy may have contracted by 0.5 per cent in the last three months of 2010.
Indeed, according to newly-installed shadow chancellor Ed Balls, Britain's recovery has now ground to a halt.
Has it? Well, a word or two of caution.
This is only a first-pass at assessing GDP in the final quarter. The figures which the Office for National Statistics releases at this time of the month are based on an initial assessment of only 40 per cent of all the data which goes into the mix.
So the ONS will routinely revise this figure at a later date when it has done some further number crunching.
If the experience of the preceding quarters is anything to go by, that revision is likely to be up.
It would have some ground to make up, of course, to get back into positive territory. But it's worth bearing in mind what ONS chief economist, Joe Grice, said this morning: that 0.5 per cent of the fall can be attributed almost entirely to the severe weather which ran from the last week of November up to Christmas.
In other words, without the big freeze, the initial figure suggests the economy was at a standstill in the last three months of the year - it lost as much as it gained.
There are gains out there - manufacturing businesses are doing well, largely on the basis of exports driven by a weak pound.
But the service sector which dominates our economy is still struggling, and clearly didn't benefit from the weather. Neither did construction, which isn't exactly in rude health to start with.
One more point. History tells us that when an economy comes out of recession it will bob up and down as it tries to find a way forward. Fall backs are not unusual.
So, these figures aren't good, but they are not the full picture. And it's premature to paint them as a disaster.
The bigger issue is not the GDP of three months ago, but where business goes from here. I'll be blogging on some interesting ideas about that later.
UPDATE: Ian McCafferty, the CBI's chief economic adviser, has just said this: "On this data it is far too early to conclude that the UK economy faces a serious double-dip, and it will be some months before a true picture of its underlying performance becomes clear."