United Kingdom: Second quarter GDP revised upwards
August 24, 2012
In the second quarter, GDP declined a seasonally adjusted 0.5% over the previous quarter, according to the second estimate released by the Office for National Statistics (ONS) on 24 August. The reading was revised up from an advance estimate of a 0.7% contraction released on 25 July, but still came in below the 0.3% contraction seen in the first quarter. Compared to the same period last year, the economy decreased 0.5%, which followed a 0.2% contraction in Q1. The deterioration over the previous quarter was mostly the result of a lower contribution from the external sector to overall growth, which stepped down from minus 0.4 percentage points in the first quarter to minus 1.0 percentage points in the second quarter. While exports mirrored the 1.7% contraction observed in the preceding three-month period, imports swung from a 0.3% decline in the first quarter to a 1.4% increase in the second quarter. Domestic demand picked up from a 0.1% increase in the first quarter to a 0.5% expansion in the second, boosted by a build-up of inventories. In contrast, fixed investment swung from a 1.9% rise in the first quarter to a 3.2% contraction, while private consumption deteriorated to a 0.3% decline (Q1: -0.1% quarter-on-quarter). Government spending also moderated markedly from a 1.9% rise in the first quarter to a flat reading in the second quarter. Based on figures from its latest inflation report from August, the Bank of England projects the economy to contract 0.2% this year before expanding 1.8% in 2013.