The UK’s Office for National Statistics said earlier today (pdf, press release) that the British economy grew 0.2% last year rather than not at all, as it was previously estimated. The upward revision is a bit of good news after the downgrading of British sovereign debt last week and comes amid concerns that the UK could face a third recession since 2008 (a “triple-dip” recession, as it is often called). But the fourth-quarter GDP contraction of 0.3% wasn’t revised.
While the UK “should be able to eke out modest growth in the first quarter of 2013, there is no denying that the economy continues to find it hard to develop even modest sustainable expansion,” says Howard Archer, of IHS Global Insight. “It may not steady the sinking ship, but at least it hasn’t added any more holes,” says Jason Conibear of Cambridge Mercantile.
Still, critics of current government measures to bring the UK out of recession point to the data as more evidence of why officials need to rethink austerity measures to be announced in the country’s new budget published next month.
The services sector—which makes up three-quarters of the British economy—was revised down to a 0.1% contraction, compared to zero growth, for 2012. Production also fell 1.9% compared to a previously estimated 1.8% fall.
The overall change in 2012 GDP compared to 2011 was due to revisions in first- and third-quarter data. The third-quarter growth was revised upward to 1.0% from 0.9% growth, boosted partly by Olympic Games ticket sales. The first-quarter 2012 contraction was revised from 0.2% to 0.1%.