Prime Minister David Cameron gestures as he addresses the media in Ankara
Prime Minister David Cameron gestures as he addresses the media in Ankara July 27, 2010. REUTERS

With further revisions of UK Q2 GDP not out until out 23rd August, the Office of National Statistics continues to process emerging indicators with UK output, income and expenditure out this Friday along with Land Registry House Prices.

The first revision - 1.1 pct of UK Q2 GDP contains just 44 pct of information and is thought to be muddied by Government spending. Inside Friday's data, the income and expenditure is expected to show how much of UK Q2 GDP came from spending with UK's Chancellor of the Exchequer, George Osbourne believes to have reduced the contribution from public sector finances.

"The previous government's economic policy was based on two central assumptions - that they had abolished the economic cycle and that they had achieved a permanently higher trend rate of economic growth." said Osbourne on Thursday last week, "These assumptions were used to justify increased spending, persistent deficits, cheaper credit, growing imbalances and ballooning personal debt. Of course many of the same features existed elsewhere, notably the US, but they were more pronounced in Britain than anywhere else." he said.

"Here in Britain we can start to be cautiously optimistic about the economic situation. GDP growth in the second quarter surpassed expectations at 1.1%, with all but 0.2% of that coming from the private sector," he said to Bloomberg.

Osbourne believes that spare capacity in the economy will lead UK's recovery and has gambled on a fiscal spending cut in order to wipe out Britain's debt - but needs continued growth in GDP to sustain this.

However, some have warned of a looming cut in public spending, throwing the UK back into recession:

"Consolidation on government spending has already started in this fiscal year. We don't know what's happening in the days that we speak, but in July (Q3) we should begin to see the effects of this. We just hope that when growth does go back, it does not go back too sharply." said Simon Kirby of the National Institute of Economic and Social Research.

The revisions of Q2 GDP which include data from monthly service sector figures out this week - are therefore set to reveal the true extent of Britain's economic recovery in what is an important week for the UK economy:

Economic Calender (out this week)

- UK output, income & expenditure (GDP)

- UK monthly service sector figures

- Land Registry House Price Index