The Office for National Statistics never loses its capacity to surprise. Against expectations of a 0.2% quarterly fall in GDP in the second quarter, its estimate is for a 0.7% fall. Some of that is due to the extra bank holiday but it seems likely there would have been a contraction even without that.
These are bad numbers, with little in the way of optimism. The economy is now smaller than wne the coalition came to power and Labour will have a field day. They are even harder to square with the buoyant employment figures.
Are they credible? Nobody doubts the economy is weak but the detail of these numbers should give some pause. The ONS has not really got its collective head around construction, and its figures, a 4.9% fall in the first quarter and a 5.2% drop in the second, suggests a sector collapsing at a 20% annual rate after being pretty flat on a quarterly basis during 2011. That does not make much sense. More here.