UK consumer spending dropped 0.4% in the second quarter, and overall gross domestic product fell by 0.5% in this period rather than by the 0.7% estimated previously, official figures show.
In spite of the revision of the GDP drop to a slightly less steep fall, the figures published yesterday by the Office for National Statistics confirm the UK economy remained stuck firmly in recession in the three months to June.
UK GDP fell by 0.4% in the final three months of 2011 and by 0.3% in the opening quarter of this year.
Separate data published yesterday by the ONS showed UK business investment dropped by 1.5% or about £500 million quarter-on-quarter in the three months to June, to £30billion.
The breakdown of the GDP statistics painted a worrying picture.
GDP received a significant boost in the second quarter from a £2.6bn rise in inventories. Stockbuilding, by its nature, can provide no more than a temporary boost.
The 0.4% fall in household expenditure in the second quarter was the fifth drop in six quarters, and highlights the pressure on the consumer sector of the economy at a time of weak wage growth, swingeing public spending cuts and fears over employment.
Net trade proved a big drag on UK economic output in the second quarter in spite of Chancellor George Osborne's vision, in his March 2011 Budget, of "a Britain carried aloft by the march of the makers".
Exports fell by 1.7% in the second quarter, while imports rose by 1.4%.
The ONS cited its belief that the extra bank holiday in June, for the Queen's Diamond Jubilee, may have proved a drag on second-quarter GDP.
Vicky Redwood, chief UK economist at consultancy Capital Economics, cited potential for a rebound in UK GDP in the third quarter as the bank holiday effect unwound and any boost from the London 2012 Olympics came through.
However, she declared: "This will obviously just be a temporary pick-up."
Ms Redwood warned that a weakening of the Chartered Institute of Purchasing and Supply's manufacturing and service sector surveys in July suggested "underlying activity in the third quarter got off to a poor start".
She added: "Given the drags from the fiscal squeeze, eurozone crisis and high domestic debt levels, we still doubt that a strong recovery lies ahead. Indeed, the economy could well return to contraction in the final quarter of the year."
The ONS yesterday stuck with its initial estimate that the dominant services sector contracted by 0.1% in the three months to June. The drop in construction output has been revised from 5.2% to 3.9%. The fall in manufacturing output has been revised from 1.4% to 0.9%.
Esmond Birnie, chief economist in Scotland and Northern Ireland for accountancy firm PricewaterhouseCoopers, said: "As many commentators had expected, ONS's upward revision of the Q2 GDP figures offers a less gloomy view of the extent of decline, over the last quarter, particularly in construction output. Nevertheless, the latest data still show declines across most sectors, [including 0.9% in manufacturing and] 0.1% for the service sector."
He added: "Even after today's revision, UK GDP remains 4% down on the pre-banking crisis peak and, in broad terms, output has been flat over the last two years.
"Compared to other major Western economies the UK's recovery has been relatively subdued and (the) revisions confirm that the recession is merely 'less worse' than previously thought."
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