ONS figures show recession worse than originally thought
Despite the talking heads wheeled out for soundbites in the news, it looks like the UK’s economy is worse off than originally thought – at least according to the official figures from the Office for National Statistics.
Overall, in the last three months of 2011, the UK economy shrank by 0.4 percent rather than the first estimate of 0.3 percent. The economy shrank 0.3 percent in the first quarter of 2012 which was not adjusted.
According to the findings, the BBC reports, the UK is deeper into recession than had previously ben reported – that is, there have been two consecutive quarters of economic contraction.
The Office of National Statistics reports that construction activity fell 4.9 percent and household spending fell 0.1 percent – compared to the original estimate of 0.1 percent growth. Production industry output dropped 0.5 percent, along with manufacturing output which dropped 0.3 percent. The services industry did rise by 0.2 percent.
The BBC reported that the British government also increased its spending between January and March this year at unheard of rates over the past seven years. Chief UK economist at Capital Economics, Vicky Redwood, speaking with Auntie, attempted to place the blame on the extra bank holiday given for the Queen’s Jubilee. “GDP is likely to have contracted again in the second quarter,” Redwood said.
There is speculation that the Bank of England will begin a quantitative easing programme, in other words, buying government debt.