Britain’s gross domestic product (GDP) contracted by 0.7% in the second quarter of 2012, much worse than anticipated by economic forecasters.
The news stunned the City of London which led to further analyst predictions that Britain’s AAA credit rating would be affected.
Output from the production industries declined by 1.3% in the second quarter of the year, compared to the first while the construction sector plummeted by 5.2%, after a 4.9% drop in both Q4 2011 and Q1 2012.
Meanwhile, the service industries were down 0.1% compared to and increase of 0.2% over the previous two quarters.
Restaurants and hotels suffered too, with a drop of 0.4% in Q2, compared to a 0.3% decrease between Q2 2011 and Q2 2012.
Legal and accounting firms – which include insolvency practitioners – made the largest positive contribution to the business services and finance index which increased by 0.8% between Q2 2011 and Q2 2012.
As part of the celebrations for the Queens Diamond Jubilee, there were changes to bank holidays in May and June 2012.
The end of May bank holiday moved to June and there was an additional day’s holiday in June. Over the quarter, this resulted in one fewer working days.