The Office for National Statistics (ONS) published its annual revision of historic economic data for the UK today, which indicate that the expected double dip recession did not occur. Growth was flat in the first quarter of 2012, instead of the earlier estimate of a 0.1% contraction; therefore the UK economy did not contract for two quarters in a row, which is how a recession is defined.
GDP was reported as being 3.9% lower in the first quarter of 2013 than the pre-financial crisis peak in the first quarter of 2008, as opposed to the previous estimate of 2.6%. The figures reveal that the recession of 2008 and 2009 was even deeper than previously thought and economic analysts are said to believe that this means the UK had further to go to recover lost ground.
According to the ONS data, household living standards at the start of 2013 had declined to the greatest degree since 1987, with real disposable income falling by 1.7% as prices rose and wages fell or stayed the same.
However the ONS estimate of 0.3% quarterly growth in the first three months of 2013 is said to have taken economists by surprise because it was previous feared that the UK would experience a ‘triple-dip’.
Chief economist at ONS, Joe Grice, commented: “Today ONS has revised the GDP growth figure for Quarter 1 2012. In rounded percentage terms, it has gone from minus 0.1pc to zero. It is a tiny change, but there is a danger false significance will be attached to it “adding that “The picture presented by these movements is important and needs to be taken seriously. By comparison, whether output is up a bit or down a bit in one particularly quarter scarcely weighs on the scale.”