Outlook may not be so gloomy as predicted
The gloomy news on GDP may be deceptive and could well be revised upwards according to a Northern Ireland economist.
Esmond Birnie, chief economist for PriceWaterhouseCooper in Northern Ireland, said that while the 0.3% plunge over the quarter of April to June was a much bigger drop than expected, there may be slight cheer ahead.
"Given that the economy probably grew - albeit modestly - in April and May, the ONS estimate is therefore heavily influenced by economic performance in June, where a very large drop in output is estimated," he said.
"The very poor June data therefore comes with a health warning as the ONS has very limited information for June at this stage and their estimate of activity is heavily affected by the extra Jubilee holiday.
"We could therefore see it revised upwards, as well as seeing a strong recovery in the third quarter, boosted by overseas visitors for the Olympics.
"Regional data is largely unavailable, but it is likely that regions, including Northern Ireland, will have suffered a sharp fall in construction activity which may conceal some better regional performance in manufacturing and services.
"However, across 2012 and 2013, most UK regions can expect to see some level of growth and recovery as business surveys have been pointing to sluggish growth rather than decline.
"But UK business surveys have weakened in response to the impact of the euro crisis and this remains the biggest source of worry for the UK economy."