British economy almost grinds to a halt
LONDON—Britain’s economy almost ground to a halt in the second quarter slowed by weak consumer spending and industrial output, revised data showed on Wednesday.
Gross domestic product (GDP) – the combined value of all services and goods produced in the economy – grew by just 0.1 percent in the three months to June, the Office for National Statistics said in a statement.
The data compared with its previous official estimate for growth of 0.2 percent.
GDP growth for the first quarter was also trimmed to 0.4 percent from a prior reading of 0.5 percent, the ONS added.
“The weakness of growth in both quarters, particularly the second quarter, reflects a number of pressures that are being felt in the wider economy by both business and households,” it added.
The economy limped through the second quarter amid a sharp 0.8-percent drop in consumer spending and a 1.2-percent slide in the production industries.
Britain’s official statistics office added that changes in calculation methods added to the downward revisions.
“Growths in the first and second quarters of 2011 have both been revised down by 0.1 percentage points. This is due to a combination of methodological changes, classification changes and the inclusion of new data,” the ONS said.
The downbeat data sparked fresh market speculation that the Bank of England could decide to pump more cash into the economy, at the conclusion of its monthly monetary policy meeting on Thursday.
Wednesday’s growth figures also come amid heightened concern on international financial markets that the fast-moving eurozone debt crisis and the sluggish US economy could plunge the world back into another fierce global downturn.
The ONS also revealed that the 2008/2009 recession was much deeper than previously thought – but ended three months sooner than first estimated.
The British economy shrank by 1.3 percent, 2 percent and 2.3 percent in the last three quarters of 2008. That compared with previous estimates for contraction of 0.3 percent, 0.9 percent and 2.1 percent respectively.
However the ONS added that Britain actually emerged from recession in the third quarter of 2009, instead of the final three months as previously thought.
The economy grew by 0.2 percent in the three months to September 2008. That was upgraded from the prior estimate for a contraction of 0.3 percent.
