UK economy performs worse than expected this quarter
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".
You might also be interested in
I've been a journalist for four years, writing on a wide variety of topics from business and finance to travel, culture and celebrities. I began my career as an editorial assistant for Palladian Publications, a B2B publisher specialising in technical magazines for professionals in primary industries. I later moved into consumer magazines as a...