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UK GDP figure revised down further | |
(40 minutes later) | |
The UK economy shrank by more than previously thought during the last three months of 2010, revised figures show. | |
Gross domestic product (GDP) slipped by 0.6% in the period, according to fresh data from the Office for National Statistics (ONS). | |
Its initial estimate had suggested the economy had contracted by 0.5% - with heavy snow blamed for the slump. | Its initial estimate had suggested the economy had contracted by 0.5% - with heavy snow blamed for the slump. |
However the ONS said that the revision was not a dramatic one. | |
"Its not that much of a shock, this is a very small revision," the organisation's chief economist Joe Grice told BBC News. | |
"The snow effect we think is still 0.5%. On the basis of that, the economy is still flattish at minus 0.1%. The overall picture is still a flattish underlying economy in the fourth quarter." | |
The ONS statement added that manufacturing appeared to have done quite well, but that the construction industry was weak. The services sector, which accounts for a large percentage of the economy, contracted. | |
'Disappointing' | |
Labour has criticised the the introduction of a VAT rise and the government's plans to dramatically cut public spending while the recovery remains fragile. | |
But a Treasury spokesman said it stood by its position. | |
"The chancellor said that the fourth-quarter growth figures were disappointing and today's revision doesn't change that fact. | |
"It also doesn't change the need to deal with the nation's credit card - the country is borrowing more this year than is spent on the entire NHS. | |
"What's more, the survey data so far this year has exceeded expectations." | |
The revised data may affect how quickly the Bank of England moves to raise interest rates. | |
Documents from the Bank's rate-setters, released on Wednesday, had hinted that those who had opposed a hike in rates this month would consider a change in stance if the UK's GDP figures, suggested the economy had picked up. | |
Three of the bank's policymakers voted for a rate rise, with the remaining six MPC members voting to keep rates at historic 0.5% lows. | |
Worries are growing about the recent pick-up in inflation, boosted by rising commodity prices and the VAT increase. |