It turns out Britain did not suffer a double-dip recession early last year as previously thought.
The UK’s Office for National Statistics (ONS) has just done a major annual revision of historic economic data.
That showed that in the first three months of 2012 the economy did not contract, but rather was flat. As a result it avoided the two consecutive quarters of contraction which commonly define a recession.
However the latest numbers from the statisticians were pretty grim – demonstrating Britons are getting poorer.
Real disposable income fell 1.7 percent in the first three months of this year with wages down and prices rising. That was the biggest quarterly drop since 1987.
It was confirmed that Britain’s economy expanded by 0.3 percent in the first quarter of this year. That was the one figure that was not revised by the ONS.
At the same time, Britain’s current account deficit with the rest of the world unexpectedly widened to 3.6 percent of gross domestic product and business investment slumped by 16.5 percent on the year.
That undermines government hopes for an economic recovery driven by exports and capital spending.
Further historic revisions now also show that the recession between the second quarter of 2008 and the second quarter of 2009 inclusive was deeper than thought, leading to a 7.2 percent fall in output, compared with previous estimates of a 6.3 percent fall.
Britain’s slowest economic recovery on record since then means that output is still 3.9 percent below its pre-recession peak – compared with an earlier estimate of 2.6 percent below.