UK economy shrinks 0.6% in Q2

The recession-hit British economy shrank 0.6 per cent in the second quarter of this year, a tad less than the earlier projection of 0.7 per cent contraction, stoking fresh hopes of an early recovery.

The less than expected fall in GDP was primarily on account of improvement in construction and manufacturing industries' outputs, the UK's Office for National Statistics said in a statement today.

After being hit by one of the worst financial turmoils in decades, the global economy is witnessing signs of revival, with many of the developed nations including Germany, France and Japan exiting recession.

"Gross Domestic Product (GDP) contracted by 0.6 per cent in the second quarter of 2009. This has been revised from a fall of 0.7 per cent in the previous estimate of GDP, due to upward revisions to construction output," the statement said.

On an year-on-year basis, the economy has declined at 5.5 per cent.

Construction output dropped by just 0.8 per cent over the quarter, as against the earlier estimate of 2.2 per cent fall.

"Output of the production industries fell by 0.5 per cent compared with a fall of 5.1 per cent in the previous quarter, with output of manufacturing industries falling by 0.1 per cent compared with a fall of 5.4 per cent in the previous quarter," the statement noted.

The trade deficit in real terms declined to 6.5 billion pounds in the second quarter as against 7.3 billion pounds in the first three months of 2009.