The U.K. economy contracted by slightly less than had been previously forecast for the last three months of 2010 as services and factory output were higher than initially thought, according to The Daily Telegraph. On Tuesday, the Office for National Statistics revised its previous estimate for fourth-quarter gross domestic product growth upwards from 0.6% to 0.5%, which still represents the largest quarterly decline in GDP in a year and a half. The statistics agency estimated that harsh winter weather knocked 0.5% off of GDP during the quarter, accounting for the entire economic contraction.
The report showed that industrial production output grew by 0.8% rather than 0.7% as had been initially reported, and services activity shrank by 0.6% rather than the 0.7% decline that was initially estimated. However, real household disposable income was down by 0.5% in 2010, which is the first annual drop since 1981. The ONS said, “Real household spending and fixed investment growth both fell in quarter four, which may reflect weakness in business and consumer confidence and a moderation in the growth of real household disposable income.”
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