UK Economy Contracted in May and June

The UK’s GDP is a direct casualty of its housing slump. From the Telegraph:

The Office for National Statistics reported that Britain’s gross domestic product grew by only 0.2pc in the second quarter – the slowest quarterly growth for three years…

They also warned that the figures showed that although strong growth in April helped keep the overall quarterly growth rate in positive territory, GDP actually shrank in May and June, by 0.2pc and 0.3pc respectively. This underlines the likelihood that Britain is now skating close to a period of contraction, according to Geoff Dicks of Royal Bank of Scotland.

“On our estimates a rise of fractionally more than 0.1pc a month between July and September would be enough to avoid a quarter of negative growth though, on the trend of the last two months, you would not bet on it.”….

Paul Dales of Capital Economics, said: “An outright recession is now our central scenario. With industrial production having fallen in both the first and second quarters, industry is already in recession.

“Looking ahead, the more up-to-date surveys suggest that in Q3 so far, overall economic growth has ground to a complete halt.”