The British economy may not be officially in a recession after revised data revealed that the second quarter was profitable.
Initial estimates indicated a 0.1% decline in GDP between April and June, however this has been revised to a 0.2% increase.
Therefore, UK plc may not be in a technical recession, which is defined as two consecutive quarters of decline, as the Bank of England stated earlier this month.
However, the increase for April-June was mostly attributable to a more pessimistic appraisal of the previous quarter’s performance, with the economy being smaller than it was before the Covid crisis.
The Office for National Statistics (ONS) now believes the pandemic caused an 11% decline in 2020, as opposed to the 9.3% decline previously predicted.
This makes it the largest recession since the Great Frost of 1709, since the post-World War I slump was 9.7 percent. Previous modifications reduced the size of the initial 300-year record-breaking hit.
Instead of being 0.6% larger than it was before Covid, the ONS now estimates that GDP is 0.2% smaller.
According to the organization, the United Kingdom is the only G7 nation that has not regained ground from Covid.
Initial estimates indicated a 0.2% decline in GDP between April and June, however this has been revised to a 0.1% increase.
The Bank of England hinted this week that the United Kingdom is already in a recession when it projected another 0.2% decrease for the three months ending in September.
However, according to the latest ONS data, even if the economy drops as projected this quarter, it will not be in recession yet.
The ONS attributed the upward revision to improvements in the health care and banking sectors.
Chief economist of the ONS, Grant Fitzner, stated, “These revised numbers indicate that the economy expanded in the second quarter.
They also indicate that, despite a decline in household savings in the most recent quarter, households saved more during and after the epidemic than previously believed.
According to the ONS, the United Kingdom is the only G7 nation to have lost ground to Covid.