In the first quarter, GDP contracted a seasonally adjusted 0.3% over the previous quarter, according to the second estimate released by the Office for National Statistics (ONS) on 24 May. The figure was revised down a notch from the preliminary estimate of a 0.2% decline released on 25 April and thus mirrored the drop recorded in the preceding quarter. Compared to the same period last year, the economy posted a 0.1% contraction, which contrasted the 0.5% rise recorded in the final quarter of 2011. The quarterly decline was the result of a deterioration in both the domestic and external sectors. Gross fixed capital formation remained in negative territory by posting a 0.3% contraction (Q4 2011: -0.6% quarter-on-quarter). Moreover, a decline in inventories represented a further drag on first quarter growth. Moreover, private consumption moderated to a paltry 0.1% increase (Q4 2011: +0.4% qoq) which, nevertheless, was offset by a surprising 1.6% expansion in government spending, which represents its fastest pace of expansion in four years. Exports grew only 0.1% over the previous quarter, which came in well below the 1.6% expansion seen in Q4 2011. Imports followed suit and moderated to a 0.4% rise, which was down from the 0.9% increase recorded in the preceding quarter. As a result, the external sector's net contribution to overall growth swung from plus 0.2 percentage points in the fourth quarter to minus 0.1 percentage points in the first. Based on figures from its latest inflation report from May, the Bank of England projects the economy to grow 0.6% this year and 2.1% in 2013.
United Kingdom GDP
First quarter GDP contraction worse than previously estimated
May 30, 2012
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United Kingdom GDP Chart
Note: Quarter-on-quarter changes of seasonally adjusted GDP and year-on-year variation in %.
Source: Office for National Statistics (ONS) and FocusEconomics Consensus Forecast.
United Kingdom Economic News
October 21, 2016
Following nearly four months of little or no news regarding formal negotiations with the European Union, in early October, Prime Minister Theresa May finally shed some light on the Brexit timeline and announced that Article 50 of the Lisbon Treaty will likely be triggered before the end of March 2017.
October 19, 2016
In September, jobless claims increased by 700 from the previous month, according to the Office for National Statistics (ONS).
October 18, 2016
In September, consumer prices increased 0.2% from the previous month, which came in below the 0.3% increase seen in the previous month.
October 8, 2016
In August, industrial production contracted 0.4% over the previous month in seasonally-adjusted terms, which contrasted the 0.1% increase recorded in July.
October 3, 2016
In September, the manufacturing sector recovered the ground it had lost after the EU referendum.