Economy contraction not as marked as thought - Economy - News - Moneyfacts


Economy contraction not as marked as thought

Economy contraction not as marked as thought

Category: Economy

Updated: 04/12/2009
First Published: 26/11/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The UK economy did not contract as markedly as first thought in the three months between July and September, according to figures from the Office for National Statistics (ONS).

The original estimate said that economic output in the UK fell by 0.4 per cent during the quarter, but the latest revision has found that it actually shrank by slightly less, at 0.3 per cent.

Both the manufacturing and service sectors performed better in the third quarter than was first thought.

Many analysts had expected the first figures to show that the UK came out of recession during the period. These latest figures confirm that the economy has faltered in each of the last six quarters, the worst run of results since records began in 1955.

Politicians have been criticised for failing to lead the country out of recession, especially in the light of other countries, namely France, Germany and the US recording growth in recent months.

"Our economy is still excessively relying on the public sector. Government consumption and investment have both increased, but the fall in business investment threatens our future productive potential," said David Kern, chief economist at the British Chambers of Commerce. "With the economy still facing significant problems, the Government and MPC must take urgent action to end the recession. "This should focus on sustaining demand and removing the obstacles restricting companies' ability to invest and grow. Next month's Pre-Budget Report will be a perfect opportunity to announce some of the most pressing measures."

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