Britain's double-dip recession not as deep as previously feared - Irish Examiner

  

Britain's double-dip recession not as deep as previously feared

By Holly Williams

Friday, September 28, 2012

The double-dip recession in Britain is not as deep as previously feared after revised figures showed a smaller contraction in the second quarter of the year.

The Office for National Statistics (ONS) said gross domestic product (GDP) fell 0.4% between April and June in the second upward revision.

Its initial 0.7% contraction estimate shocked Britain's financial community in July, but smaller than previously thought falls in production, manufacturing, and construction improved the decline to 0.5% last month and now to 0.4%.

Hopes are now mounting of a return to growth in the third quarter after Bank of England governor Mervyn King said last week there were "signs of a slow recovery".

Retail figures from the CBI, the country's biggest business lobby group, yesterday also offered some cheer after revealing a modest sales increase on the high street this month.

Yesterday's news had been expected by economists after the ONS recently revised output from the construction sector up from a fall of 3.9% to 3%.

The ONS has revised up output from the production industry from a drop of 0.9% to 0.7% and manufacturing output from a fall of 0.9% to 0.8%.

The drop in household spending is also not as bad as first thought, down by 0.2% against previous estimates of a 0.4% decline.

However, ONS data confirms the pressure on the economy, with the current account deficit widening to a record high of 5.4% of GDP, at £20.8bn (€26.1) in the second quarter, almost double the original estimate of £11.2bn.

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© This appeared in the printed version of the Irish Examiner Friday, September 28, 2012