FYI
July 24 2009
UK economy suffers further slump
The recession-blighted UK economy shrank by a far worse than expected 0.8% between April and June, gloomy official estimates showed.
The fifth successive quarter of decline is much bigger than the 0.3% fall in output forecast by economists and deals a blow to recovery hopes.
The economy has slumped 5.6% since the second quarter of 2008, the Office for National Statistics (ONS) said - the biggest fall since its records began in 1955.
The economy has now shrunk by 5.7% since the first quarter of last year, the ONS said - more than double the depth of the early 1990s recession and approaching the level of the slump seen in the early 1980s.
Although the figures bettered the 2.4% contraction seen in the first three months of 2009 - the worst since 1958 - experts were hoping for a much bigger improvement in the economy.
A 0.7% decline in output from business services and finance was the biggest driver behind the 0.8% fall in output in the second quarter of the year, the statistics showed.
The services industry - accounting for almost three-quarters of overall economic output - showed a 0.6% decline.
Construction industry output fell 2.2% over the quarter and is now 14.7% below the same period last year, which is the biggest fall since records began in 1948. Production industry output - such as construction, mining and manufacturing - fell 0.7% between April and June, the ONS added.
Howard Archer, of IHS Global Insight, called the figures "a really nasty and disappointing shock".
He said: "The sharp second-quarter drop suggests that hopes of recovery over the coming months are based on even rockier ground."
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So why the upturn?
🙂
