The UK economy shrank less than previously thought during the 2008-09 recession, though the downturn remains easily the worst since modern records began in 1948, revisions to official data showed today.

British economic output is now estimated at 4.6% lower in 2009 than it was in 2007. 

The decline had been set at 5.2% on June 30 and 6% in the last major annual revision to gross domestic product data, in 2013. 

The Office for National Statistics is overhauling how it calculates UK GDP in response to new European Union statistical rules and some domestic changes, and publishing regular updates. 

Further revisions - including quarterly data and figures covering 2010-2012 - are due in September. 

The main cause of today's revision was a change in how much Britain's economy was estimated to have contracted as it entered recession in 2008. 

The ONS now believes Britain's economy shrank just 0.3% in 2008, compared with an estimate of a 1.1 % decline published only six weeks ago.

Last year, it said Britain's economy shrank by 0.8% in 2008. 

The ONS said the latest change was due to "further quality assurance work" and that the average growth rate in Britain's economy between 1998 and 2009 was unchanged at 2.2%. It had no further details on the exact reason for the change in 2008.

UK retail sales rose in July, driven by furniture

British retail sales growth rose in July, driven by an upturn in furniture spending and other non-food purchases, according to figures from the British Retail Consortium (BRC). 

Total retail spending was 1.3% higher in July compared with the same month a year ago, the BRC said, as growth picked up from June's comparatively weak rate of 0.6%. 

But sales on a like-for-like basis - a measure which strips out changes in floor space and is favoured by analysts - fell 0.3% on the year, bucking expectations for a 0.6% rise. 

Furniture sales rose at the fastest pace since January, excluding distortions from the Easter holidays, but spending on food declined again, marking its deepest three-month average fall since records started in December 2008. 

Consumer spending has been a major driver of Britain's unexpectedly strong economic recovery over the past year, but in May, the Bank of England said it expected the rate of growth to fall slightly in the second half of 2014. The Bank releases updated forecasts for the UK economy tomorrow. 

Analysts said that reduced spending on food reflected prolonged discounting from grocers, adding that price wars were likely to stay for the foreseeable future. 

Britain's four big supermarkets - Tesco, Sainsbury's, Wal-Mart's Asda and Morrisons - have been trying to regain market share lost to discounters like Aldi and Lidl. 

The UK's Office for National Statistics publishes July retail sales data later this morning that covers a broader range of stores than the BRC data, which focuses on larger chains. 

The ONS reported that retail sales stagnated in June, though a strong performance in April and May allowed the second quarter as a whole to deliver the biggest increase in the volume of goods sold for ten years.