Revised GDP figures put the drop in the fourth quarter of last year at 1.6%, from an originally-estimated 1.5%. 2008 growth as a whole was unrevised at 0.7%. The downward revision, which puts Q4 GDP 2% lower than a year earlier, reflected weakness across the board, but in particular in construction, revised from a fall of 1.1% to a drop of 4.9%. It came in spite of an upward revision to business investment in the quarter. Household expenditure dropped by 1% as the saving ratio recovered from 1.7% to 4.8%. More details here.
Spencer Dale, the Bank of England’s chief economist, gave this assessment of the outlook in a speech: “Near-term prospects are bleak. Output is likely to contract further in the first half of this year, as a weakening labour market and concerns about job prospects weigh on consumption, companies run down their stocks and scale back investment spending, and the synchronised slowing in world demand restrains export growth. But as we go through 2009, I believe it is most likely that the pace at which output is contracting will ease and that we will see some signs of recovery by around the turn of this year.” The speech is here.
Originally published at About David Smith’s EconomicsUK.com and reproduced here with the author’s permission.