UK economy shrunk by 0.5 pct in quarter

LONDON - Agence France-Presse

The Bank of England cut on Aug 8 its growth forecast for the year 2012. Only weeks later, the national statistics organization posted a second quarter shrinkage data. EPA photo

Britain’s economic output fell by 0.5 percent in the second quarter, which was better than previously thought but still left the country mired in recession, official data showed on Aug. 24.

“U.K. gross domestic product [GDP] in volume terms decreased by 0.5 percent in the second quarter of 2012, revised from the previously estimated 0.7 percent decline,” the Office for National Statistics (ONS) said in a statement.

Better than forecast

Smaller-than-expected falls in the production and construction sectors were behind the revision.
The GDP figure tallied with analysts’ consensus forecast for a contraction of 0.5 percent between April and June.

Britain was already in recession after posting two successive negative quarters since late 2011.

The economy shrank 0.4 percent in the fourth quarter of last year and by 0.3 percent in the first quarter of 2012. Both these readings were left unchanged.

The ONS added on Aug. 24 that economic output dropped 0.5 percent in the second quarter compared with the same period one year earlier.

That also marked an improvement from the prior estimate for a contraction of 0.8 percent.