LONDON, Sept 30 — Households helped to limit the damage to Britain’s economy as it shrank ahead of Brexit in the second quarter, according to new data that also showed their financial health was less fragile than previously thought.

The Office for National Statistics confirmed the economy contracted at a quarterly rate of 0.2 per cent in the second quarter, a hangover from a stockpiling boom before the original Brexit deadline that was postponed until October 31.

New data showed Britain’s households have been net lenders to the economy rather than net borrowers.

"People have been donating less to charity than previously thought as well as receiving more money from renting out homes,” ONS statistician Rob Kent-Smith said.

Changes to the measurement of student loans also contributed to change in the status of households to net lenders, although the figures still showed a "significant” deterioration since the 2016 Brexit vote.

Today’s figures showed Britain’s current account deficit narrowed by less than expected, to £25.2 billion (RM130 billion) from £33.1 billion.

At 4.6 per cent of gross domestic product, the deficit was larger than any economist had expected in a Reuters poll which had pointed to a deficit of £19.5 billion.

Bank of England Governor Mark Carney described Britain as dependent "on the kindness of strangers” before the 2016 Brexit referendum, and last month the BoE said the current account deficit still posed economic risks.

A drop-off in foreign investors’ demand for British assets could trigger a further fall in sterling and make it harder for businesses and consumers to raise finance or borrow.

Britain’s economy has slowed since the Brexit referendum, and now faces increased headwinds from trade tensions between the United States and China and a slowdown in Europe.

The economy grew by 1.3 per cent in the year to the end of June, revised up from an earlier estimate of 1.2 per cent.

The figures confirmed that spending from households and the government — the latter rising at the fastest annual rate since late 2008 — were among the few positive drivers of growth in Britain’s economy in the second quarter, with business investment falling again. — Reuters