UK recession fears remain as ONS confirms second quarter decline
The Office for National Statistics (ONS) has confirmed that the UK economy slid into decline in the second quarter of 2019, in the latest update of its figures.
UK GDP fell 0.2% in the quarter to June 2019, the ONS said, as it confirmed the figure was unrevised from its previous estimate.
It means the UK economy could enter a recession if it remains in decline in the third quarter of 2019.
However, the new GDP figures also showed that the UK economy grew slightly faster than previously thought at the start of 2019.
The ONS said that the economy expanded by 0.6% in the January to March quarter, up from its previous estimate of 0.5%, due to the wave of extra stockpiling ahead of the original Brexit deadline.
This resulted in lifting the annual growth rate at the end of June to 1.3%, up from the figure of 1.2%.
Rob Kent-Smith, head of GDP at the ONS, said: “Headline GDP remained unrevised in the latest quarter with the economy contracting, partly due to a fallback in manufacturing following the UK’s originally planned EU departure date.
“Improved data sources and new methods mean our estimates now show households have been lenders in recent quarters.
“In addition, our improved method for measuring student loans means that, due to our new way of recording loan cancellations, overall less money is being lent to households by the Government.”
Howard Archer, chief economic adviser at EY Item Club, said: “On the output side of the economy, manufacturing output suffered a major correction in the second quarter as there was a running down of the stocks that had been built up by producers and their clients in the first quarter in case a disruptive no-deal Brexit had occurred at the end of March.
“We believe the economy likely returned to growth in the third quarter of 2019, with expansion seen around 0.3-0.4% in the second quarter, against the previous period.”