UK economy contracts more than expected
Official figures have today revealed that the UK economy shrank more than expected in the three months to June.
Today’s figures, which are preliminary estimates and could be revised up or down in the next few months, show that the economy contracted 0.8% between April and June – economists had expected a fall of 0.3%.
On an annual basis, the rate of decline was 5.6% – the largest fall since records began almost 55 years ago.
The figures suggest that a recovery could take longer than previously thought.
Since the onset of the recession in April last year, the economy has now shrunk by 5.7% – far more than the downturn in the 1990s and close to the 6.4% contraction seen in the early 1980s.
Hetal Mehta, senior economic advisor to the Ernst & Young ITEM Club, the influential think-tank, said that “the data showed that hopes for a recovery had run ahead of reality”
“With credit still severely restricted, consumers and businesses continuing to retrench and world trade yet to pick up, it is hard to see any grounds for sustained optimism at the moment.” he added.
Earlier this week, the Ernst & Young Item Club said that the UK economy is heading for a ‘fragile recovery’ and warned of the threat posed to the economy from swine flu.
Visited 1329 times, 1 so far today
Comments (0)
Trackback URL | Comments RSS Feed
There are no comments yet. Why not be the first to speak your mind.