Uk 1q gdp drop largest quarterly decline since 1958

inspector_monkfish

09:30 30Jun09 UK 1Q GDP REVISED TO -2.4% QQ; LAST ESTIMATE -1.9% QQ
09:30 30Jun09 UK 1Q GDP REVISED TO -4.9% YY; LAST ESTIMATE -4.1% YY
09:30 30Jun09 UK 1Q GDP FORECAST AT -2.2% QQ; -4.4% YY
09:30 30Jun09 UK 1Q GDP DROP LARGEST QUARTERLY DECLINE SINCE 1958
09:30 30Jun09 UK RECESSION NOW SHOWN STARTING IN 2Q 2008


(story to follow)

inspector_monkfish

09:30 30Jun09 UK Q1 GDP posts biggest fall in 50 years

LONDON, June 30 - The British economy contracted at a much sharper pace than initially thought and at its fastest rate in more than 50 years in the first three months of this year, official data showed on Tuesday.

The Office for National Statistics said GDP fell by 2.4 percent in the three months to March compared with an earlier estimate for a fall of 1.9 percent. That was the biggest rate of decline since the second quarter of 1958 and worse than analysts' predictions for a fall of 2.1 percent.

GDP fell 4.9 percent compared with a year ago, the biggest decline on record. The previous estimate had been a fall of 4.1 percent.

The extremely large revisions were a result of changes to the methodology of calculating construction output and also lower services output, which each contributed around half of the downgrade.

The data also showed GDP fell in the second quarter of 2008, meaning the recession started earlier.

Separately, the ONS released data on the balance of payments. The current account recorded a deficit of 8.540 billion pounds.

purch

a result of changes to the methodology of calculating construction output

Roughly translated : "a result of changes to the way the number is guessed"

ad9898_3

I don't think we should take any notice of this, after all we will be returning to growth by the end of the year.:rolleyes:

StevieJ

inspector_monkfish wrote: »

09:30 30Jun09 UK Q1 GDP posts biggest fall in 50 years

The data also showed GDP fell in the second quarter of 2008, meaning the recession started earlier.

Did we not already know this? I am sure I mentioned it on a thread to Kenny a couple of months ago

kennyboy66_2

You did, I thought it had already been downgraded from 0.0% to minus 0.3%

StevieJ

kennyboy66 wrote: »

You did, I thought it had already been downgraded from 0.0% to minus 0.3%

Maybe I am Psychic my prediction of the market to bottom at 20% in Spring 09
and now that

ad9898_3

So not only are the government fiddling figures going forward, they are also fiddling them in the past as well, who'd have thunk it.

Graham_Devon

Word of warning folks.

The recession ends here. See, now that the figure has been revised down further, more green shoots can be talked about.

With the figure now at -2.4% for the first quarter, we are never going to match that for the second quarter. Which means, recession ended. Even if we get negative growth of -2.3%.

If the figures were left at -1.9%, we may have had a bigger fall in the second quarter, unlikely, but do-able, and been left in recession.

So this really quite severe news will be spun out of all proportion when the next lot of bad news comes along with the second quarter results, which instead of being seen as big negative drops, are heralded as the end of the recession and green shoots turned into blossoming trees.

StevieJ

More confused words of wisdom from Dev

Graham_Devon

StevieJ wrote: »

More confused words of wisdom from Dev

Second quarter data is not going to match first quarter or be worse.

Which means it will be the end of the recession, as one quarter of "less negative" growth means recession ended.

So if we get negative growth of -2.1% in quarter 2, the recession is officially over.

That in itself with pave the way for endless green shoots reports.