Britain’s economy shrank by 0.7 per cent in the second quarter, a smaller decline than the 0.8 per cent initially estimated, official figures showed this morning.
The annual drop in GDP was also revised up to show a 5.5 per cent fall. The initial estimates had suggested a 5.6 per cent decline.
However, this is still the sharpest annual fall since records began in 1955.
The FTSE 100 blue-chip index, which had begun to rally before the figures were published, was 1.01 per cent higher, up 49.44 points at 4,918.79.
Economists had expected the figure to remain unchanged, but the official figures showed that statisticians had revised up their estimates for the manufacturing, energy, wholesale and motor vehicles sectors.
The Office for National Statistics said that there was anecdotal evidence that the Government’s car scrappage scheme had helped to boost the car industry.
Despite this positive news, however, the figures still showed record falls in construction output since records began in 1948.
The service sector also recorded the biggest annual decline since official records began in 1955.
George Buckley, a Deutsche Bank economist, said: “The upward revision was a bit of a surprise but it still shows a fairly steep contraction.”
But he added that companies were still running down their inventories, suggesting that the economy could benefit as they began to restock.
“The most important piece of news is on inventories which continued to fall at a fairly aggressive pace,” he said.