By IANS,
London : The British economy shrank by 0.8 percent between April and June, more than double the rate predicted, the Office of National Statistics said Friday.
The contraction was less than the 2.4 percent seen in the first quarter of 2009 but was well above analysts’ 0.3 percent prediction.
The latest figures take the annual rate of decline to 5.6 percent, the biggest fall since modern economic records began to be kept in 1955.
Andrew Sentance, a member of the Bank of England Monetary Policy Committee, said Thursday that “we should see some evidence of positive growth in the second half of the year”.
“Tying that down to a particular quarter is difficult. There are negative drags in particular problems in the banking sector,” he said.
But Hetal Mehta, senior economic advisor to the Ernst & Young ITEM Club, the British economic forecasting group, said: “With credit still severely restricted, consumers and businesses continuing to retrench and world trade yet to pick up, it is hard to see any grounds for sustained optimism at the moment.”
The GDP fall was put down to shrinking business services and finances.
“We’re past the worst, but we’re not heading for a boom,” said Alan Clarke, an economist at BNP Paribas, the European banking and financial group.