Wednesday, 25 July 2012 11:26
Economy shrinks by 0.7 per cent between April and June
The UK economy shrank by 0.7 per cent in the second quarter of 2012, according to figures from the Office for National Statistics today.
This was the third consecutive period of negative growth after a 0.3 per cent decline in Q1 and 0.4 per cent decline in Q4 2011 and was greater than economists had forecast.
The biggest decline came from the construction sector where output declined by 5.2 per cent in Q2 and by 9.7 per cent year on year. Production output declined by 1.3 per cent due to manufacturing, mining and quarrying while growth in the service industry declined by 0.1 per cent.
It was also noted by the ONS that the Diamond Jubilee bank holiday in June and bad weather would have an effect on the figures but said further details would be given in later revisions.
Business services and finance increased by 0.1 per cent thanks to employment activities and legal and accounting activities, up from a decrease of 0.3 per cent in Q1. Year on year the business services and finance sector increased by 0.8 per cent.
Government and other services increased by 0.3 per cent due to positive contributions from health and sport activities and amusement and recreation.
Chancellor George Osborne said the figures confirmed the UK's 'deep-rooted economic problems'.
Richard Lloyd, executive director at Which? consumer group, said: "The Chancellor needs to get money back in people's pockets to help households who are struggling to cope with rising fuel, energy, mortgage and food costs. That's what will really boost consumer confidence and spending power, which is essential for getting sustainable growth going in the economy."
This was the third consecutive period of negative growth after a 0.3 per cent decline in Q1 and 0.4 per cent decline in Q4 2011 and was greater than economists had forecast.
The biggest decline came from the construction sector where output declined by 5.2 per cent in Q2 and by 9.7 per cent year on year. Production output declined by 1.3 per cent due to manufacturing, mining and quarrying while growth in the service industry declined by 0.1 per cent.
It was also noted by the ONS that the Diamond Jubilee bank holiday in June and bad weather would have an effect on the figures but said further details would be given in later revisions.
Business services and finance increased by 0.1 per cent thanks to employment activities and legal and accounting activities, up from a decrease of 0.3 per cent in Q1. Year on year the business services and finance sector increased by 0.8 per cent.
Government and other services increased by 0.3 per cent due to positive contributions from health and sport activities and amusement and recreation.
Chancellor George Osborne said the figures confirmed the UK's 'deep-rooted economic problems'.
Richard Lloyd, executive director at Which? consumer group, said: "The Chancellor needs to get money back in people's pockets to help households who are struggling to cope with rising fuel, energy, mortgage and food costs. That's what will really boost consumer confidence and spending power, which is essential for getting sustainable growth going in the economy."
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