Revised figures show worse decline in UK manufacturing

Britain's manufacturers fared worse than previously feared between April and June, but the fall wasn't big enough to damp the growth of the wider economy, number-crunchers declared today.

The Office for National Statistics stuck to its original 0.2% estimate for second quarter growth despite a bigger fall in manufacturing output, which was down 0.5% rather than the 0.3% fall pencilled in last month. The shortfall was made up by smaller declines in other production industries and slightly stronger services growth.

The UK's second-quarter performance was hit by warm weather, the Royal Wedding bank holiday and the fall-out from Japan's tsunami, although recent poor figures from Europe such as Germany's near stagnation have put a better gloss on the figures.

The economy should recover some lost ground in the third quarter, although uncertainties remain such as the impact of stock market turmoil and the riots.

Capital Economics economist Samuel Tombs said: "Growth in the third quarter has the potential to be quite a bit stronger than in the second as temporary factors unwind. However, with the forward-looking indicators for the third quarter remaining downbeat and recent stock market turmoil clouding the outlook, we strongly doubt that any small pick-up in GDP growth in third quarter will reignite the recovery."