- 11 updates
Shadow Financial Secretary to the Treasury Chris Leslie has told ITV News that the UK economy is in a "vulnerable positions and that Chancellor George Osborne, is "stubbornly refusing to take any action and what we've got to have some help."
Rachel Reeves MP, Labour’s Shadow Chief Secretary to the Treasury, responding to the revised GDP figures, said:
The GDP figures released today suggest that the extra bank holiday for the Queen's Diamond Jubilee and the washout start to the summer did not have as much of an effect as previously feared.
Economists believe the extra bank holiday may have knocked as much as 0.5% off GDP, but the ONS said it was too early to measure the effect.
There are fears that the economy will struggle to pull out of its double-dip recession in the current quarter as the eurozone debt crisis slows global growth.
Vicky Redwood, Chief UK Economist at Capital Economics has said:
"UK GDP was revised up in Q2 as expected, but the revision is very small in the big picture and means that output is still more than 4% below its pre-recession peak.
"Remember that the extra bank holiday probably knocked about 0.5% off GDP. But even so, underlying output is just stagnating. What’s more, the spending breakdown shows a strong contribution to growth in Q2 from stockbuilding (an unsustainable source of strength).
"Consumer spending and investment both fell and net trade knocked a full 1 percentage point off quarterly growth. Of course, the GDP figures may in the future be revised up further.
"Nonetheless, given the drags from the fiscal squeeze, euro-zone crisis and high domestic debt levels, we still doubt that a strong recovery lies ahead. "
Shadow Business Secretary Chuka Umunna has tweeted his reaction to the GDP figures:
Figures released showed the UK's trade deficit increased to £7.3 billion, up from £3.7 billion in the previous quarter as the eurozone debt crisis hit exports - its biggest fall since the third quarter of 2010, which wiped 1% off the GDP figure.
The Office for National Statistics has released the following details of the UK economy in the second quarter of 2012:
- Output of the production industries fell by 0.9%, within which manufacturing output also fell by 0.9%.
- Output of the services industries fell by 0.1%, while output of the construction industry fell by 3.9%.
- Household final consumption expenditure decreased by 0.4% in volume terms in the latest quarter.
- In current price terms, compensation of employees rose by 1.8% in the second quarter of 2012.
HM Treasury spokesperson said:
Gross domestic product shrank by 0.5% between April and June, the Office for National Statistics said today, better than previously estimated.
According to the last set of figures from the Office for National Statistics, the UK economy contracted by 0.7%.
- Very few economists were expecting it to have shrunk by that extent
- Some economists predict the figure could be revised to 0.5%
- The figure of 0.7% didn't appear to match up with the latest unemployment figures