UK Economy Shrinks For The First Time In Seven Years

9 August 2019, 09:50 | Updated: 9 August 2019, 10:02

The UK economy has shrunk for the first time since 2012, new figures show.

The Office for National Statistics has said the country's economy shrank by 0.2% in the second quarter of this year.

Market Commentator David Buik from Core Spreads told LBC: "It's not good news. We knew it wasn't going to be good news, but most commentators thought it would be flat or -0.1%.

"We had a significantly good first quarter up to 0.5% due to stockpiling, so there was an enormous amount of advanced activity on import and exports. The economy was therefore looking better than it actually was.

"Because we had such a good one in the first quarter, there's been an over-reaction in the second quarter.

"But if we get a minus figure in the next quarter, then your listeners have the right to put their head in their hands and say we are in recession."

The ONS's Head of GDP Rob Kent Smith said: “GDP contracted in the second quarter for the first time since 2012 after robust growth in the first quarter. Manufacturing output fell back after a strong start to the year, with production brought forward ahead of the UK’s original departure date from the EU.

“The construction sector also weakened after a buoyant beginning to the year, while the often-dominant service sector delivered virtually no growth at all.

“The trade deficit narrowed markedly, as imports fell following a sharp rise in the first quarter ahead of the UK’s original departure date from the EU.”