Slump continues as GDP contracts again

GOVERNMENT data released this morning has confirmed that the UK economy contracted for a third quarter in a row and remains in recession.

GDP contracted by 0.7% in the second quarter of the year. The contraction was significantly worse than the consensus among analysts which had predicted a 0.2% fall.

Construction sector output shrank by 5.2% in the second quarter, compared to production industries which fell by 1.3% and services by 0.1%.

However, the Office for National Statistics warned the extra bank holiday and the weather may have skewed the figures and the underlying performance of the economy could have been better than the figures suggest.

In the first three months of the year, national wealth as measured by gross domestic product shrank 0.3%.

That follows a 0.4% contraction in the last three months of 2011.

Last week, the International Monetary Fund lowered its growth forecasts for the UK economy to 0.2% in 2012 and 1.4% in 2013.