Today’s second revision to gross domestic product in the final quarter of 2012 left the quarterly change unchanged at a fall of 0.3%. Consumer spending was revised up, to show an increase of 0.4%, from 0.2%, but overall investment fell by 0.2% and the deficit on net trade rose to £6 billion, from £5.3 billion in the third quarter.
As always, there is interest in the revisions. Most people are aware that GDP figures get revised over time, though there are always one or two “revision deniers” around. The latest revisions show that the double-dip recession at the end of 2011 and into 2012 is now close to being revised away. A year ago we had GDP falls of 0.3% in the final quarter of 2011 and 0.2% in the first quarter of 2012. Now they are each 0.1% and the small fall in the first quarter of 2012 is very close to being revised to zero – it already has been for GDP excluding North Sea oil and gas.
None of this changes the fact that growth is disappointing, or that the economy is failing to rebalance. The current account deficit widened alarmingly last year to £57.7 billion, from £20.2 billion in 2011. The fourth quarter deficit was £14 billion, 3.6% of GDP, slightly down from £15 billion in the third quarter.
This piece is cross-posted from David Smith’s Economics UK with permission.