UK GDP for Q2 2012: -0.5% on the quarter, -0.5% on the year; both figures are better than the preliminary estimate
Commenting on the revised GDP figures for the second quarter of 2012, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The revised GDP figures show a smaller decline than in the preliminary estimate, as both construction and industrial output fell by less than originally thought. While this is a welcome revision, we believe the new figures are still too pessimistic. Three consecutive quarterly declines in GDP since the fourth quarter of 2011 are difficult to reconcile, with rising employment and falls in the jobless rate.
“However, some of the new detail is concerning. Exports, investment and consumer spending all fell over the quarter while imports rose. It is clear that domestic austerity measures and the eurozone crisis are putting serious pressures on both businesses and consumers, while the rebalancing of the economy towards net exports is proving difficult. Government consumption rose over the past year in spite of the fall in GDP, which contradicts the impression that public spending cuts are happening too quickly.
“While gloomy ONS figures risk damaging confidence unnecessarily, it is clear that the UK economy has been stagnant for some time, and we need to see bold action to drive growth. While it is important to persevere with spending cuts, the government must take initiatives to boost infrastructure spending, support the construction sector and move towards the creation of a business bank.”