Bloomberg News

U.K. Economy Shrank 0.2% in Second Quarter, Niesr Estimates

July 10, 2012

Britain’s economy shrank for a third quarter in the three months through June as a recession deepened, according to the National Institute of Economic and Social Research, which said an extra holiday skewed the data.

Gross domestic product fell 0.2 percent from the first quarter, Niesr, whose clients include the Bank of England and the U.K. Treasury, said in a statement in London today. The data are “distorted” by the additional public holiday in June for the queen’s Diamond Jubilee and underling growth “was more robust than these headline estimates suggest,” it said.

Bank of England Governor Mervyn King said in a BBC interview broadcast today that he’s worried about the outlook for U.K. exports and the economy “doesn’t show a great deal of signs of impending recovery.” The central bank increased its bond-purchase target by 50 billion pounds ($78 billion) to 375 billion pounds last week to help revive the economy.

Underlying growth for the three months to June was around 0.2 percent, Niesr said, adding that these figures “suggest that the U.K. economy remains broadly flat.” GDP fell 0.3 percent in the first quarter of 2012 after a 0.4 percent drop in the final three months of 2011.

To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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