UK GDP Estimated to Have Fallen by 0.1 Percent in Second Quarter

UK GDP Estimated to Have Fallen by 0.1 Percent in Second Quarter
Undated file photo showing Sterling notes and coins. (Dominic Lipinski/PA Media)
Lily Zhou

The UK’s real gross domestic product (GDP) is estimated to have fallen by 0.6 percent in June and by 0.1 percent in the second quarter, according to official figures.

The Official for National Statistics (ONS) on Friday published its GDP monthly estimate for June and the first quarterly estimate for April to June.

In June, GDP is estimated to have fallen by 0.6 percent, following a 0.4 percent growth (revised down from an estimated 0.5 percent growth) in May.

The shrinkage was mainly driven by the fall in services output (o.5 percent), with the further reduction of COVID-19 test and trace activities and the continued tailing off of the spring booster campaign for COVID-19 vaccination, according to the ONS.

The data was also skewed due to the spring bank holiday being moved from May to June and the extra bank holiday to celebrate Queen Elizabeth II’s platinum jubilee, meaning there were two fewer working days in June.

Production output in June fell by 0.9 percent, following an increase of 1.3 percent in May. The ONS said this was mainly because of a fall of 1.6 percent in manufacturing following strong growth in May.

Construction fell by 1.4 percent, following seven consecutive months of growth.

Output in consumer-facing services remained flat in June and was 4.9 percent below the pre-pandemic levels in February 2020, but all other services were 2.7 percent above their pre-pandemic levels. Accommodation and food services and arts, entertainment, and recreation sectors, which were recovering following the ease of COVID-19 restrictions, contributed 0.07 and 0.04 percent growth to the month’s GDP.

From April to June, the GDP was estimated to have shrunk by 0.1 percent compared to the last quarter but grew by 0.6 percent from the quarter before the COVID-19 pandemic.

Services fell by 0.4 percent, also largely driven by the reduction in COVID-19 activities.

Nominal GDP in the second quarter grew by 1.1 percent on the first quarter, 9.1 percent above the second quarter last year, and 10.5 percent above the last pre-pandemic quarter due to soaring inflation.

The ONS also compared the estimated second-quarter GDP growths among the Group of Seven nations, showing no change in Germany, 0.2 percent negative growth in the United States, 0.5 percent growth in France, 1 percent growth in Italy, and 1.1 percent growth in Canada.

The estimates are subject to revision.

Two consecutive quarters of negative growth is normally considered a recession.

The ONS data comes after the Bank of England forecasted five consecutive quarters of negative growth in the UK’s GDP.

However, there has been a growing number of economists who argue that GDP does not provide a full picture of a country’s economic well-being.

Lily Zhou is an Irish-based reporter covering UK news for The Epoch Times.
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