Holidays cut into UK growth
LONDON, England -- The UK economy grew at a weaker pace than originally thought in the second quarter due mainly to a slowdown in manufacturing as workers took time off far more than usual.
The main reason for the slide in production was two extra holidays in June to celebrate Queen Elizabeth II's Golden Jubilee and additional days to watch World Cup football matches.
British gross domestic product rose by a revised 0.6 percent between April and May from the previous quarter, the Office for National Statistics said on Friday. It had previously estimated GDP growth of 0.9 percent in the second quarter.
The ONS said the downward revision, which was in line with analysts' forecasts, was caused by a bigger than expected drop in manufacturing output in June during the Jubilee and World Cup, as well as production cuts by major automakers.
Activity in the manufacturing sector -- which accounts for about one-fifth of the economy -- declined by 0.7 percent in the second quarter and by 5.3 percent year-on-year.
Year-on-year, the ONS said the economy expanded by a revised 1.2 percent in the second quarter -- compared to an original growth estimate of 1.5 percent -- after almost grinding to a halt in the fourth quarter of 2001 and first quarter of this year.
"There's not much new here but at 0.6 percent growth, the UK economy has been growing below trend since Q2 2000," David Page, an economist at Investec, told Reuters.
Despite the downward revision for the second quarter, the UK economy -- the second biggest in Europe -- still outpaced growth by other members of the Group of Seven industrialised nations.
The GDP figures come just one day after data showed UK retail sales rose less than expected in July.
Seasonally adjusted sales volume rose 0.3 percent last month, bringing the year-on-year growth rate to 4.5 percent, the ONS said on Thursday. Economists had expected a month-on-month rise of 0.6 percent and an annual increase of 4.7 percent.
However, the ONS said the July figures may have also been distorted by the Golden Jubilee celebrations, which reduced the amount of shopping days in June.
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