Tuesday, 30 June 2009

DATA SNAP: UK 1Q GDP -2.4% QQ; Largest Decline In 50 Years

DATA SNAP: UK 1Q GDP -2.4% QQ; Largest Decline In 50 Years

By Laurence Norman

Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--The U.K. economy posted its sharpest decline in more than 50 years in the first quarter, suggesting the recession has been even harsher than previously thought, the Office for National Statistics said Tuesday.

The ONS said the economy slumped a downwardly revised 2.40% in the first quarter, which was narrowly the largest decline since the second quarter of 1958. The annual decline in output was 4.9%, the largest since records began in 1948.

Economists had expected a smaller downward revision in the first-quarter gross domestic product data. In a Dow Jones Newswires survey last week, they forecast the economy would shrink 2.2% on the quarter and 4.4% on the year.

First quarter GDP was originally reported at -1.9% on the quarter and -4.1% on the year.

The final reading of the national accounts data showed the household savings ratio slipped to 3.0% in the first quarter from 4.0% in the fourth, reflecting lower wages and salaries.

Household expenditure dropped 1.3% in the first quarter on a quarterly basis, the biggest decline since 1980. Real household disposable income fell 2.4%, also the largest since 1980.

The ONS revised 2008 GDP numbers. They found the economy shrunk 0.1% in the second quarter compared with flat output reported previously. That means the U.K. recession started in April 2008.

-By Laurence Norman, Dow Jones Newswires; 44-207-842-9270; laurence.norman@dowjones.com

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(END) Dow Jones Newswires

June 30, 2009 04:35 ET (08:35 GMT)


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