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UK economy contracted by 0.5% in second quarter

The UK economy wasn't quite as bad as feared in the second quarter of the year, contracting by 0.5% rather than a previously estimated -0.7%.

 
UK economy contracted by 0.5% in second quarter

The UK economy didn’t contract as much as previously thought in the second quarter of the year, according to a revision of the statistics, which still show the UK suffered a third consecutive quarter of negative growth at -0.5%.

Economists had been immediately sceptical of the Office for National Statistics’ first reading of GDP growth of -0.7%, made a month ago, as it didn’t tally with slightly more upbeat business surveys nor a relatively resilient labour market.

Construction output – which alongside record rainfall and the Queen’s Diamond Jubilee celebrations was particularly blamed for the deepening recession in the second quarter of the year – was revised up to -3.9% today, from the previous reading of -5.2%

The ONS publishes three readings of GDP as more data becomes available, and the figures can often be quite different. Today’s figure is based on 67% of the data used for the third and final reading, whereas the first estimate is based on just 44% of the final data.

Today’s figure still marks the third consecutive quarter of economic contraction and confirms the UK economy as one of the worst performers since the onset of the financial crisis, amid subdued consumer and business activity at home and weak global economic activity.

Pressure is growing on David Cameron's coalition government to scale back its spending cuts and provide a strategy to boost growth.

6 comments so far. Why not have your say?

andrew sutherland

Aug 24, 2012 at 12:28

So is this meant to be a joyous moment? We're still in negative territory, and it's pretty sad when it gets to the stage that -0.5 is not as bad as -0.7. I imagine all the economists etc will be congratulating themselves for a job well done.

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Jn

Aug 24, 2012 at 12:54

I say it again, why publish three readings of GDP as the first one is always wrong. Even the second. Silly and stupid.

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Graham Willows

Aug 24, 2012 at 12:57

0.2% of something is better than 0.2% of nothing , the old ones are the best Andrew .

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Geoff Downs

Aug 24, 2012 at 14:23

What about the debt? I thought that was worse now, or doesn't that matter?

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Dennis .

Aug 24, 2012 at 14:32

I just wonder how you can measure something as diverse and variable as the UK economy to an accuracy of a couple of percent anyway.

I remember back in the 80's and the focus was on trade balance which was always negative but dismissed as OK due to "invisible" exports ie insurance and finance etc

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Anthony O' Grady

Aug 24, 2012 at 19:10

Reading about the UK economy reminds me of a seventies record by the vapors.

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