LONDON, Aug 7 (Reuters) - Britain's economy contracted
slightly in the three months ending in July, although the
estimate was distorted by an extra public holiday and another
postponed day off to mark Queen Elizabeth's 60 years on the
throne, a leading think-tank said on Tuesday.
Gross domestic product fell by 0.2 percent in the period,
after official data showed a sharp contraction of 0.7 percent
between April and June, the National Institute of Economic and
Social Research said in its monthly estimate.
"These estimates suggest the UK's large negative output gap
is widening," NIESR said. "We do not expect output to pass its
peak in early 2008 until 2014."
The one bright spot was that NIESR's monthly GDP index rose
to 102.4 in July from 101.0 in June, taking it to its highest
level since December, raising the prospect that Britain's
economy may exit recession in the third quarter.
NIESR's estimate followed official data showing that
Britain's manufacturing output shrank by 2.9 percent in June,
sapped by extra public holidays, though the drop was smaller
than first estimated.
On Wednesday, Bank of England Governor Mervyn King looks set
to give another gloomy outlook for Britain, as the country's
economy continues to suffer from the effects of the euro zone
debt crisis and a domestic austerity programme.