Revisions to official data show the UK economy did not contract at the start of 2012, meaning the country never suffered a double-dip recession – as suggested at the time by Fund Strategy.
According to the Office for National Statistics’ United Kingdom Economic Accounts Q1 2013 report, the UK’s growth was flat in the first quarter of 2012 rather than falling by 0.1 per cent as originally estimated.
The new data follows upward revisions to weak construction output numbers, which had been blamed at the time for pushing the UK back in recession.
When the double-dip was reported in early 2012, Fund Strategy questioned whether ONS’ construction data was accurate – highlighting changes to how it is calculated and considering if the double-dip would eventually be revised away.
Fund Strategy also noted that there was a wide disparity in the official construction figures and the picture being painted by business survey such as Markit and the Chartered Institute of Purchasing & Supply’s purchasing managers’ indices.
IHS Global Insight chief UK and Europe economist Howard Archer says: “This highlights the importance of not attaching too much importance to labels like ‘double dip’ or ‘triple dip’ recessions, especially when the quarter-on-quarter changes in GDP are small in either direction.
“In reality, it makes little difference whether the economy grew marginally, contracted marginally or was flat over a quarter or a couple of quarters.”
The revision to the data comes as the ONS confirms the UK economy grew by 0.3 per cent in the first three months of 2013.