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UK economic growth revised down to 0.3% contraction | UK economic growth revised down to 0.3% contraction |
(40 minutes later) | |
The UK's economic growth for the last three months of 2011 has been revised down to a contraction of 0.3%. | The UK's economic growth for the last three months of 2011 has been revised down to a contraction of 0.3%. |
The first two estimates of gross domestic product (GDP) from the Office for National Statistics (ONS) showed a contraction of 0.2%. | The first two estimates of gross domestic product (GDP) from the Office for National Statistics (ONS) showed a contraction of 0.2%. |
The ONS blamed the revision on the transport and communications and business services and finance sectors. | The ONS blamed the revision on the transport and communications and business services and finance sectors. |
The annual figure for 2011 growth has also been revised down to 0.7% from 0.8%. | |
The ONS said real household disposable income had fallen by 1.2% in 2011, the biggest decline since 1977. | |
Analysts still expect that the economy will have grown in the first three months of 2012, meaning there would not have been a technical return to recession. | |
The pound fell to a two-week low against the US dollar of $1.5904 after the release of the data. | The pound fell to a two-week low against the US dollar of $1.5904 after the release of the data. |
"What does it mean? Probably not a lot. But it kind of makes the starting point for 2012 that little bit more difficult," said Peter Dixon at Commerzbank. | |
"To some extent where you start determines your average outcome for the year, [so] it just makes the hill a little bit steeper in order to reach the Office for Budget Responsibility's 0.8% growth target." | |
But the data from the ONS was not all revised downwards. | |
"The one bright spot in the numbers is the investment figures have been revised up and that was a particularly shocking weakness in the original estimates so I'm pleased to see that," said Brian Hilliard at Societe Generale. |