Wednesday, October 5, 2011

UK economic growth slower than previously thought

The UK economy grew by 0.1% between April and June, less than the 0.2% estimated previously.

Output from the service sector grew by 0.2%, compared with the previous estimate of 0.5%, the Office for National Statistics (ONS) said.

However, industrial output fell by less than previously thought.

The latest GDP revision is likely to raise further questions about the strength of the UK's fragile economic recovery.

The ONS said household consumption fell by 0.8% in the three-month period.

'Continued expansion'

Separately, figures suggested activity in the UK's service sector increased in September.

The Markit/PMI survey recorded a figure of 52.9 for the month, up from 51.1 in August. Any figure above 50 indicates growth.

Figures from the same company published earlier this week showed surprise growth in the manufacturing sector.

"While the UK cannot insulate itself from what is happening to our major trading partners, with financial turbulence in the eurozone and a weaker outlook for global growth, the economy is still growing and this week's survey data for the manufacturing and service sectors are consistent with continued expansion," said a Treasury spokesperson.

The government has been criticised in some quarters for concentrating too much on cutting the budget deficit at the expense of stimulating growth.

However, the Treasury reiterated that it did not intend to hold back on its spending cuts.

"The government will stick to the deficit reduction plan which has won the UK credibility and stability, but the most important thing for the economy now is restoring confidence, which will depend on the eurozone decisively dealing with its problems."

Source: www.bbc.co.uk

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