UK economy contracts more than forecast

The British economy contracted more than previous estimated in the quarter ended March 31, 2009, marking the biggest slump in GDP in five decades, according to the revised government figures released. First-quarter GDP shrank by 2.4% from the final three months of 2008, the Office for National Statistics said in London. Economists had forecast a 2.1% decline. The decline was sharper than the 1.9% initially projected. The quarterly drop was the biggest since 1958. About half the revision was due to the introduction of new construction sector data and the rest due to more complete services sector figures showing a sharper decline. Compared to the first quarter of 2008, GDP dropped 4.9%. The Office for National Statistics previously estimated a 4.1% annual drop. Separately, UK consumer confidence increased to the highest level in 14 months in June as households turned more optimistic that the worst of the global economic recession is over, GfK NOP said. An index of sentiment rose 2 points to minus 25, the strongest result since April 2008, the market researcher said in a statement today in London. The gauge of confidence about the economic outlook for the next year climbed 8 points to minus 8.