Recession: Worldwide recovery slowing

The US Commerce Department said gross domestic product (GDP) rose at an annualised rate of 1.6 per cent in April to June, down from an initial estimate of 2.4 per cent.

The sluggish advance in the US economy, down from a 3.7 per cent expansion in the first quarter, followed an upward revision to UK GDP growth by the Office for National Statistics (ONS), from 1.1 per cent to 1.2 per cent – a rate not seen in nine years.

But economists warned that US woes revealed a regression in the worldwide recovery, and further gains of such magnitude in UK growth were unlikely – particularly in the face of fierce austerity measures.

Samuel Tombs, economist with Capital Economics, said yesterday's figures showed there was "increasing evidence that the global recovery is faltering".

The advance in UK growth – the strongest since the same figure was achieved in the first quarter of 2001 – was driven by gains in the construction sector, which expanded by 8.5 per cent, its best performance since the first quarter of 1982.

The strong growth was coupled with a promising 0.7 per cent increase in consumer spending – compared with a fall of 0.1 per cent in the first quarter – boosted by World Cup sales of food, drink and televisions.