Double dip recession 'not as deep as feared'
By Stacey Siebritz
Britain's economy might not be in as much trouble as originally thought, new statistics would seem to suggest.
Recent figures released by the Office for National Statistics (ONS) revealed better-than-expected construction data, which has raised the chance of official GDP figures for the second quarter being revised up.
According to the ONS, the economy shrank by 0.7 per cent between April and June. However, this was partly based on the assumption that construction figures would fall by 5.2 per cent over the quarter.
In actual fact, further data gathering in June revealed that construction output dropped by just 3.9 per cent in the second quarter, which alone suggests a 0.1 percentage point upward revision in GDP.
The ONS has also revised up its estimate of industrial production, and these changes in figures could mean that the economy declined by just 0.5 per cent in the second quarter as opposed to 0.7 per cent.
However, it is not all good news. Samuel Tombs, UK economist, said that these revisions will not do much to improve the economic outlook in light of the renewed recession.
'What's more, the smaller than expected drop in GDP in the second quarter is likely to mean that the bounce-back in the third quarter will be weaker than otherwise,' he told the Telegraph.
11 August 2012, 12:34