Economy records slowest growth in 12 years: ONS survey |
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Thu, 29 Sep 2005 00:35
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LONDON: British economy saw its weakest annual growth in 12 years during Q2 2005 ending June, according to statistics compiled by the Office for National Statistics. The growth was pegged at 1.5 per cent, revised down from an earlier 1.8 per cent. The slower growth rate and the evident economic slowdown led to speculation that the Bank of England may consider it imperative to cut down interest rates.
The ONS said the downgrade was on account of lower estimates for public administration, defence transport and storage and motor trades.
The ONS said GDP rose by 0.5 per cent in the quarter, while household spending went up by 0.4 percent (instead of 0.2 per cent reported last month). Analysts attributed this to higher estimates for overseas spending and housing repair and maintenance work.
The ONS also released details of balance of payments, which showed a deficit of 3.050 billion pounds in the second quarter, lower than expected and the smallest since the first quarter of 2003.
Chancellor of exchequer Gordon Brown had earlier admitted that the economy would not meet the 3-3.5 per cent range forecast in the budget. He had said higher oil prices would lead to slower growth.
Prospects for Christmas were bleak according to the CBI Distributive Trades Survey. Nearly half of the retailers queried during the survey said sales were down compared with one year ago.
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