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GDP figures revised but economy still shrinking

The UK economy shrank less than first thought, as the Office for National Statistics release revised GDP decline from 0.5% to 0.7%.

Output in the production and construction sectors was slightly higher than previously estimated.

Figures for output in the service industries in Q2 of 2012 remained unrevised from the fall of 0.1%, published in July.

Graeme Leach, Chief Economist at the Institute of Directors, said: “The revised GDP figures show that the economy is flatlining. Services, which dominate the economy, declined by 0.1 per cent.

“Obviously the much sharper fall in manufacturing and construction output is a concern since it’s difficult to see where the kick to growth comes from for any sector. The core problem is the euro crisis and economic uncertainty. Until that begins to ease the UK economy will bump along the bottom.”

Andrew Sentance , senior economic adviser, PwC, said: “If we allow for the extra Jubilee holiday, the latest GDP estimate points to a flat economy, rather than decline. But other recent data, such as employment and retail sales, is more consistent with slow growth. So, it is quite possible that GDP will be revised up further in the future.

This was posted in Bdaily's Members' News section by Tom Keighley .