The UK economy ground to a halt in the second quarter of the year, revised figures revealed today, but bounced back between July and September with stronger growth than previously estimated.
Gross domestic product (GDP) grew at 0.6 per cent in the third quarter, revised up from a previous estimate of 0.5 per cent, the Office for National Statistics (ONS) said, while growth between April and June was slashed to zero from 0.1 per cent.
The third quarter was boosted by better than estimated growth in agriculture, construction and services, while the second quarter was hit by weaker than estimated figures in the services sector.
Economists have warned the third quarter was flattered as the economy played catch-up from the previous three months, which was hit by the extra bank holiday from the royal wedding and impact of the Japanese tsunami, so the overall picture of the year has been left broadly unchanged by the revisions.
"The underlying trend is very clearly one of an economy that is struggling in the face of what seems to be an ever-growing list of headwinds," said Chris Williamson, chief economist at financial services information company Markit.
Manufacturing, services and trade surveys have been mixed so far in the final quarter of the year, prompting fears that the UK is heading for a double-dip recession.
The tax and spending watchdog, the Office for Budget Responsibility, recently slashed official forecasts for growth, following a similar downbeat assessment of the economy from the Bank of England.
The powerhouse services sector, which makes up some 75 per cent of the total economy, grew at 0.7 per cent in the third quarter, up from a previous estimate of 0.6 per cent. Agriculture grew at 0.5 per cent in the third quarter, while construction was ahead 0.3 per cent.
But industrial production growth was revised down once again to 0.2 per cent from 0.4 per cent, which partially offset improvements in the stronger sectors.
The squeeze on household spending was underlined by figures revealing real disposable income growth slowed to 0.3% in the third quarter from 1.3 per cent the previous three months.
Government spending was also revised down to 0.2 per cent from 0.9 per cent — which corresponds more closely with Chancellor George Osborne's programme of deficit-busting spending cuts.
Looking back to the second quarter, growth in the services sector was revised down to 0.1 per cent from 0.2 per cent.
PA
