UK economy actually grew in 2012, revised figures reveal

UK construction activity rose by nearly a full 1% in the last three months of 2012, according to new data from the Office for National Statistics (ONS).

Output rose 0.9% in the quarter, the ONS reported, compared with an earlier 0.3% estimated increase.

The revised figure came as the ONS published a series of updated numbers for different sectors, following previously-published figures for UK economic activity.

Manufacturing output fell by 1.3% in the final three months of last year, compared with 0.7% growth in the third quarter.

While the ONS said the UK economy was expected to have grown 0.2% over the year, as opposed to an earlier ‘zero-growth’ figure, it said figures for the last three months of 2012 remained unchanged at 0.3% down.

The Centre for Economics and Business Research (CEBR) said the data meant the economy flat-lined over 2012, with gross domestic product (GDP) 2.3% lower than at its 2007 peak.

Colin Edwards, an economist with the CEBR, said today’s confirmed output contraction came after a week which has brought little to cheer for in the UK. 

“Debt continues to climb – total public net debt, excluding financial interventions, now stands at 73.8% of GDP – while on Friday the UK lost its much coveted AAA credit rating. This apparent loss of investor appeal has since pushed the pound down by 2.6% against the dollar.

“For the UK’s exporters this depreciation is likely to be welcome news – exports declined by 0.3% over 2012 as a whole - but comes with the prospect of an increase in the cost of imported goods and services, at a time when inflationary pressures from both energy and food prices represent inflationary concerns for the Bank of England.”

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