U.K. GDP Contracts Less Than Expected in Q2

The U.K. economy was 0.4% lower in the second quarter, compared to the previous quarter, according to the Office for National Statistics. That was less than the 0.5% decline previously estimated.

However, the economy remains in double-dip recession. Gross domestic product was down 0.3% in the first quarter and 0.4% in the fourth quarter of 2011.

Output of the production industries in the second quarter slipped 0.7%, which was revised up from the previously estimated drop of 0.9%. Output of the service industries fell by an unrevised 0.1%. Construction output declined only 3%, rather than by 3.9%, but remained the main drag on the economy in the second quarter.

The better-than-expected data was offset by the widening of current account deficit from a revised shortfall of £15.4 billion a quarter ago to £20.8 billion in the second quarter.

The British economy sank into recession in the final quarter of 2011 as the eurozone debt crisis and government austerity measures weighed on output. Some data point to a return to growth in the third quarter, when ticket sales for the London Olympics and a recovery of the output lost due to an extra public holiday in June may boost GDP.