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Gloucestershire Business News

UK economy shrinks in second quarter

Before the figures get pulled into the Brexit saga and their meaning lost forever, let us tell you that the UK economy shrank in the last quarter.

According to reports the contract of 0.2 per cent between April and June surprised economists and was the worst performance since 2012.

The Office for National Statistics figures come after the UK enjoyed an economic boost in the first three months of the year of 0.5 per cent as firms stockpiled ahead of the Brexit deadline (March 31) - which the nation then sailed past.

Rob Kent-Smith, head of GDP at the ONS, said there had been a fall in manufacturing output and a weakening in the construction sector.

Apparently economists had not been forecasting a contraction in the second quarter, although there had been widespread agreement the word 'stagnation' would be the diagnosis.

Just to compound matters, today's news caused the pound to slide and that word - 'recession' - has entered the conversation.

"I'm not expecting recession at all. And in fact, don't take my word for it.

"There's not a single leading forecaster out there that is expecting a recession, the independent Bank of England is not expecting recession. And that's because they know that the fundamentals remain strong," said Sajid Javid, Chancellor of the Exchequer.

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