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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%.
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.
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