Britain is now less than a 0.1 percentage point revision away from having never suffered a double-dip recession at all.
That’s the real story behind today’s gross domestic product figures, which revised not merely the most recent quarter, but also a swathe of other numbers over the past year. The Office for National Statistics said that while it was still estimating that the economy shrank by 0.3% in the final quarter of last year, growth in the preceding quarters was stronger than previously thought.
In particular, rather than falling by 0.2% in the first quarter of 2012, the economy shrank by only 0.1%. Closer examination shows that the contraction was a mere -0.083%.
The figure is significant because the quarter falls in the middle of the nine-month period of economic contraction regarded as Britain’s double dip recession. Because the technical definition of a recession is two successive quarters of negative GDP, even a small upwards revision to this figure will mean Britain never faced a double-dip recession at all.
The ONS continuously updates its estimates of economic growth in previous years as new, more comprehensive data flows in. Back in the early 90s its initial estimates showed that Britain suffered a double dip. However, in 1998 it revised these figures to show that there never was a second contraction in the UK economy.
The ONS said that the total economy expanded by 0.3% in 2012 – significantly stronger than the previous estimate of zero GDP growth. It also provided more detail on the contribution from various different parts of the economy in the final quarter of the year.
It said that consumer spending rose 0.2% and government spending 0.6%, but investment fell 0.4%. The figures underline the issue that the UK economy is still struggling to rebalance away from debt and consumer spending and towards exports and manufacturing.