George Osborne can draw little comfort from the latest UK economic data. Initial estimates by the Office of National Statistics show that national income declined in the latest quarter by 0.7 per cent, deepening the double-dip recession and heaping more pressure on the already embattled chancellor.
While the economy was widely expected to shrink, the scale of the contraction surprised on the downside. Mr Osborne said there were “no excuses”. But the figures are a puzzle, being hard to reconcile with more positive data from the job market and tax receipts.
Beyond questions about the data’s accuracy, the three months to July were unusual. Poor weather is likely to have contributed to the sharp fall in construction activity. The additional bank holiday for the diamond jubilee meant that in many sectors, production stopped for an extra day.