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The 2009 recession was shallower and the recovery since 2010 has been stronger than previously thought, according to revised official figures released yesterday.
Changes to methodology used by the Office for National Statistics (ONS) show the economic downturn after the 2008 crash was less than previously assessed, with gross domestic product (GDP) shrinking by some 6% – less than the previous "peak-to-trough" estimate of 7.2%.
Growth in each year between 2009 and 2013 was also revised up by an average 0.4 percentage points, mainly as a result of faster growth in investment.
The combined private and public sectors still suffered the longest return to health this century, but the shallower recession and stronger recovery will support the claims of both Labour and Conservatives as the general election looms. The better growth shows George Osborne's austerity measures had a more muted dampening effect on growth than previously reported, while Labour's former chancellor Alistair Darling was responsible for a less cataclysmic crash. Labour can also maintain that living standards have deteriorated under the current administration despite the improved recovery.
The ONS revisions are part of a wider effort to comply with international standards for measuring GDP and the national accounts.
The data collection agency has included spending on research and development and weapons as investment as well as the introduction of spending on illegal activities such as drugs and prostitution in the calculation of the nation's income.
Labour's shadow chief secretary to the Treasury, Chris Leslie, said the accounting changes "do not mean families or businesses are better off".
He said: "GDP growth has been revised up in every year since 2008. But it's still the case that working people are substantially worse off under this government, that the recovery was choked off in 2010 and that it is the slowest on record. The revised figures showed pre-downturn growth in 2007 was 2.6%, lower than the previously thought 3.4%. But the contraction in 2008 was 0.3%, not 0.8% as previously thought, and the decline for 2009 narrowed to 4.3%, from an earlier estimate of 5.2%. Growth in each of the three subsequent years was better than previously thought.
However, revisions going back to 1997 also cut GDP growth in 2004 and 2005, allowing the ONS to show that over the longer term, the average change to annual figures was only 0.1%.
ONS chief economist Joe Grice said: "Despite the wide ranging improvements underpinning the new estimates, the broad picture of the economy has not changed much.
"Although the downturn was less deep than previously estimated and subsequent growth stronger, it remains the case that the UK experienced the deepest recession since ONS records began in 1948 and the subsequent recovery has been unusually slow."
The ONS said the length of the downturn remains unrevised. Further figures on the impact of the changes to date will be published later this month.
It comes after the latest report from the World Economic Forum lifted the UK one place to ninth in its international competitive ratings. Chancellor George Osborne said it was a "double dose of good economic news". A Treasury spokesman said: "These ONS revisions show an economy that has been growing more strongly than previously thought, with almost every quarter under this government being revised upward."
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