Bank holiday blues hit UK economy, but by less than feared

BRITAIN’S economy contracted by less than feared in June, when an extra bank holiday for Queen Elizabeth’s platinum jubilee had been expected to exert a big drag, although output for the second quarter as a whole still contracted.

The Office for National Statistics (ONS) said gross domestic product fell by 0.6 per cent in June, the biggest contraction since January 2021 but still far less severe than the 1.3 per cent drop predicted by the consensus of economists polled by Reuters.

The ONS said services output fell by 0.5 per cent in June 2022, which was the main driver of the fall in GDP.

The additions of bank holidays in June subtracted 2 working days from the month.

For the second quarter as a whole, the economy contracted by 0.1 per cent, compared with forecasts for a 0.3 per cent drop.

Despite the better than expected tone of the data, it still pointed to growing weakness among consumer-facing sectors of the economy, like retail and restaurants, that are most exposed to a worsening cost of living crisis.

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While the economy in June was estimated to be 0.9 per cent above its pre-Covid pandemic level in February 2020, the ONS said consumer-facing services output was 4.9 per cent below. REUTERS