Fact Service October 2019

Issue 40

Short-term volatility in the UK economy

The UK economy shrank in the second quarter of the year, official figures show.

The economy, as measured by gross domestic product (GDP), contracted by 0.2% in the April to June quarter, having grown by an upwardly revised 0.6% in the January to March of the year.

In the second quarter, production output fell by a downwardly revised 1.8% — the largest decline since final quarter of 2012. This was driven by a revised 2.8% fall in manufacturing output, a more pronounced decline than previously estimated. The Office for National Statistics put this down to the effects of bringing forward activity to the first quarter of the year and the decline in car production as summer shutdowns for planned maintenance were brought forward to April by some car manufacturers. 

Despite increasing by an unrevised 0.1% in second quarter — the weakest quarterly figure in three years — the services sector continued to provide the main positive contribution to overall GDP growth in the second quarter of 2019.

The UK economy grew by 1.3% compared with the same quarter in the previous year, a slowing from 2.1% in first quarter year-on-year.