The economy shrank by slightly less than thought in the second quarter of this year – by 0.6 per cent rather than the 0.7 per cent previously estimated, the Office for National Statistics has reported. However, the growth figure for the first quarter was revised down by 0.1 per cent to minus 2.6 per cent, and other adjustments mean that the British economy still contracted by 5.5 per cent over a year.
Improvements in the construction sector and in industrial production nudged the national income figures higher. In line with relatively strong figures on retail sales released by the CBI yesterday, the ONS also revised its estimates of household spending upwards, with evidence that the "destocking" that has hit the economy especially hard is now wearing off.
However, investment spending was marked lower. Many economists predict that this will hit the long-term productive potential of the economy.
There was less encouraging news on the contribution that trade may make to the recovery. The current account deficit widened sharply over the second quarter, to £11.4bn, higher than City estimates. This was mostly due to a drop in investment income, reflecting depressed market conditions and returns earlier this year.
Some economists said that such volatile elements did not necessarily mean a worsening trend.