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Five Quarters of Contraction - Scale of 1930s Downturn Draws Near
24th July 2009
UK national output declined 0.8% in the second quarter of 2009 and has now dropped 5.6% on the year, the largest annual decline since quarterly records began in 1955 according to the Office for National Statistics. We are now very close to an output slump on the scale of the 1930s. The drop in production was worse than analysts had expected although a note of caution is required - the data is provision and subject to revision.
Most sectors of the economy are contracting. Computer services are suffering as capital spending by UK businesses is postponed or cancelled. Services which makes up around three quarters of UK GSP fell 0.6% on the quarter with declines across the board despite a modest upturn in retail sales. Construction output declined 2.2% between April and June reflecting persistent weakness in the housing market.
More here from Stephanie Flanders of the BBC
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.