Figures for recession were undercooked
Jul 12 2010
“The economy sunk 6.4 per cent last year”
Official figures now show the recession was worse than experts initially thought.
The economy slumped by 6.4 per cent in the first three months of 2008, compared to the 6.2 per cent drop previously estimated by experts. The figures from the Office for National Statistics confirmed growth of 0.3 per cent in the first quarter of 2010, in line with earlier estimates.
Howard Archer, chief economist at IHS Global Insights, predicts continued growth for the second quarter of the year, but warns that a sustained improvement for the final six months is unlikely. He says: ‘We suspect growth will be both bumpy and gradual over the coming months in the face of serious headwinds, including major fiscal tightening, the problems in the Eurozone and serious constraints on consumers.
‘Although most of the [austerity measures] will not really start to kick in before 2011, the knowledge that it is coming may well lead to increasing consumer and business caution even before some of the measures are imposed or start to bite. Consequently, we expect U.K. GDP growth to be limited to 1.1 per cent in 2010.’