British GDP sees worse loss in Q1

Source: Agencies  |   2009-7-1  |     NEWSPAPER EDITION

THE British economy shrank by 2.4 percent in the first quarter, worse than the previous estimate of a 1.9 percent drop, the government said yesterday.

The revised figure represented the biggest drop in 30 years, matching the 2.4 percent fall recorded in the third quarter of 1979, the Office for National Statistics said.

Economic output is now 4.9 percent below the first quarter of 2008, the statistics office said.

Britain has been hard hit by the financial and economic crises, with its banks suffering heavy losses, house prices collapsing and rising unemployment. Still, some think the worst declines in growth may now be past.

Liam Byrne, chief secretary to the Treasury, said the revision had not changed the government's view that gross domestic product will rebound by the end of the year.

"There have been some tentative signs that the fall in output is moderating and I remain confident but cautious about the prospects for the economy," said Byrne.

The downward revision "clearly leaves an extremely weak platform for growth this year," said Jonathan Loynes, chief European economist at Capital Economics.

Howard Archer, chief European economist at Global Insight, said the downward revision the British economy was shocking, but "old news."