Deputy Editor Sift Media
Share this content
Tags:

UK economy performs worse than expected this quarter

24th Jul 2009
Deputy Editor Sift Media
Share this content
Kashflow logo

Figures released by the Office for National Statistics (ONS) today revealed that the economy did not perform as well expected in the three months to June.

GDP fell by 0.8%, a much sharper decline than the 0.3% predicted by analysts.

Total production output declined by 0.7% from the first quarter, while services output fell by 0.6%. Within that sector, business services and finance contributed most to the decline, with a 0.7% fall.

"The provisional UK GDP figures for Q2 are shockingly bad and firmly dash any hopes that the UK had already pulled out of recession", according to Vicky Redwood, economist at Capital Economics, speaking to the Financial Times this morning.

"These figures blow a hole in the chancellor's GDP forecast for the year. The government's failure to address the crisis in bank lending is only making the economic outlook worse", said Liberal Democrat shadow chancellor Vince Cable.

"The glass half empty view is that the figures are worse than predicted, but on the plus side it is a marked improvement on Q1, which saw a decline of 2.4%. It's a significantly large turnaround and could be a reflection of the economy starting to move towards positive growth in time for the back end of the year", Dr Dominic Swords, business economist at Henley Business School, told AccountingWEB.co.uk.

"The difference between analysts' predictions and the actual outcome reveals how fragile and difficult to read the economy is at the moment", he added.

Speaking to AccountingWEB.co.uk this afternoon, Anthony Evans, assistant professor of economics at ESCP Europe said: "Undoubtedly a declining GDP reflects economic hardship, but crises are synonymous with opportunity. The wider economy is going through a readjustment phase and this was never going to be a short term phenomena".

Tags:

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.