2009-11-25 07:58:00
The UK economy contracted at a slower pace than originally estimated between
July and September, figures show.
Third quarter economic output shrank by 0.3%, an improvement on the original
estimate of a 0.4% contraction.
The first estimate surprised analysts by showing that the economy was still in
recession and not growing.
The new figures confirm the economy has contracted for six consecutive quarters
- the longest unbroken stretch of declines since records began in 1955.
ANALYSIS
Stephanie Flanders, BBC economics editor We may not like the fact that Britain
failed to follow the rest of the G7 out of recession in the third quarter, but
we're stuck with it. At least for now.
The first revision of that "shocking" first estimate for GDP is in the right
direction, but it doesn't change the fact that the UK is still technically in
recession.
And to judge by the robust defence of its numbers also produced today by the
ONS, our official statistical agency doesn't expect later revisions to change
the picture substantially.
They now believe that the service sector and manufacturing did a little better
than first thought, whereas the production industries fared a little worse. But
these are modest changes.
Many more forward-looking surveys and leading indicators - national and
international - paint a brighter picture of the UK economy today.
But with the possible exception of the labour market data, that broad-based
improvement is still not showing itself in the data collected by the ONS.
The UK is lagging many of its rivals. France, Germany Japan and the US have all
already exited recession.
Alan Clarke from BNP Paribas said: "We still think there are further upward
revisions to come [to the third quarter figures]. I think it will end up at
close to zero but it takes time."
The latest set of figures from the Office for National Statistics (ONS)
contained upgrades for the motor sector, which may have been due to the impact
of the government's car scrappage scheme.
"We do know that motor trades were a little bit stronger and it's possible,
though we can't be sure, that the car scrappage scheme had a little bit more
effect than we'd previously allowed for," said Joe Grice, chief economist at
the ONS.
Output in the service sector was revised to a fall of 0.1%, an improvement to
the original estimate of a 0.2% decline.
The manufacturing sector was also revised to a fall of 0.1% from the previous
estimate of 0.2%. However, lower oil and gas extraction meant that overall
production fell by more than previously estimated.
Earlier on Wednesday, Bank of England monetary policy committee member Andrew
Sentance said there were signs the UK economy had returned to growth in the
second half of this year.