LONDON, Sept 30 - Growth in the British economy was twice as fast as first thought in the second quarter, revised official data showed on Tuesday, coming in at 0.6 percent. The Office for National Statistics said the massive upward revision was due almost entirely to much higher than estimated construction output in figures supplied to it by the Department of Trade and Industry The figures are an embarrassment to the ONS and DTI and will anger the Bank of England, which sets interest rates and cut them in July at least in part due to the weak second quarter growth figure. But now the figures show the economy was growing at roughly its long-term trend rate in the April to June period and was not really sluggish at all as had been thought.
It said it was working with the DTI to improve the models the DTI uses for first and second estimates each quarter, before it provides actual data of output for the third estimate. The ONS said it was aware of the deficiencies in the construction data. The ONS also released data showing the country suffered its worst ever current account deficit in the quarter, of 8.6 billion pounds. The big deficit was largely due to a drop in investment income due to lower profits of UK companies operating abroad, especially oil companies. It was also caused by foreign owned companies, especially banks and insurers, making higher profits in Britain. The ONS said it had revised growth for 2002 to 1.7 percent from the 1.9 percent it had reported under the 1995 base year. It has changed the base year for the series to 2000 from 1995. From now on it will rebase the series each year rather than every five. //