* Major revision of data shows UK did not enter technical
recession in early 2012
* Other revisions show economic performance worse than
* Revisions may impact Bank of England view on more
By David Milliken and William Schomberg
LONDON, June 27 Britain did not suffer a
double-dip recession early last year as previously thought, but
household living standards suffered their biggest drop in a
generation at the start of 2013.
The Office for National Statistics said on Thursday that
following a major annual revision of historic economic data,
figures now showed that output flat-lined in the first three
months of 2012 rather than contracting.
This meant Britain did not suffer the two consecutive
quarters of contraction which commonly define a recession -
fillip for finance minister George Osborne, whose spending cuts
since 2010 are blamed by political opponents for causing
unnecessarily slow economic growth.
However, other figures from the ONS were almost
Britons' real disposable income fell by 1.7 percent in the
first three months of 2013, the biggest quarterly drop since
1987, driven down by an outright fall in wages and rising
prices, causing households to reduce their savings to the lowest
share of income since early 2009.
Britain's current account deficit with the rest of the world
unexpectedly widened to 3.6 percent of gross domestic product
and business investment slumped by 16.5 percent on the year,
casting doubt on government hopes for an economic recovery
driven by exports and capital spending.
"Overall it does look as if UK economic history has been
revised in a negative direction," said Victoria Clarke, an
economist at Investec.
"It certainly looks as if the UK is a step further away now
from 'escape velocity'. We suspect that this, coupled with some
inflation projections in August, will be enough to tilt the
balance for the (Bank of England) to sanction more QE," she
said, referring to asset-buying quantitative easing.
Further historic revisions now also show that the recession
between the second quarter of 2008 and the second quarter of
2009 inclusive was deeper than thought, leading to a 7.2 percent
fall in output, compared with previous estimates of a 6.3
Britain's slowest economic recovery on record since then
means that output is still 3.9 percent below its pre-recession
peak - compared with an earlier estimate of 2.6 percent below.
The one figure that was not revised was the estimate of 0.3
percent quarterly growth in the first three months of 2013, a
figure that surprised many economists who had been fearing a
'triple-dip' recession before it first came out in April.
Other recent data and surveys have also pointed to a
strengthening of growth in the second quarter, with the Bank of
England forecasting a 0.5 percent expansion.
However, the economy remains fragile and many economists
expect the central bank to restart its quantitative easing asset
purchases of provide other stimulus soon after former Canadian
central bank chief takes Mark Carney takes over from governor
Mervyn King on July 1.