UK economy – not as bad as predicted, says ONS

The office of National Statistics (ONS) has revised its GDP estimate – the economy contracted by 0.5% during the second quarter, less than the 0.7% it announced last month, according to its latest figures.

The ONS said construction output decreased by 3.9% in 2012 quarter two compared with a decrease of 4.9% in first quarter of the year. Manufacturing output slipped by 0.9% for the period.

New figures also show that the UK’s trade deficit increased to £7.3bn, up from £3.7bn in the previous quarter – its biggest fall since the third quarter of 2010, a result of the continuing eurozone debt crisis. Business investment also fell for the first time for more than a year.

A Treasury spokesperson said: “Britain is dealing with some very deep-rooted problems at home and a very serious debt crisis abroad and that is why the healing of the economy is proving to be a slow and difficult process.

“Compared to two years ago the deficit is down, inflation is down, and there are more private sector jobs.”

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