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UK emerges from recession with Q3 GDP growth of 1.0%

THE UK has officially emerged from one of the longest recessions in living memory, latest figures released today show.

Figures released by the Office for National Statistics show the economy grow by a better-than-expected 1.0% in the three months between July and September.

The production sector grew by 1.1% and the service sector by 1.3%. However, the construction sector continued to struggle, down 2.5%.

Factors such as the Olympics are said to have had a positive impact on the period.

Joe Grice, of the ONS, said a number of other factors had played a part in the return to growth from the second quarter, which he said had struggled due to the extra Bank Holiday for the Queen’s Diamond Jubilee and the wet weather.

However, he said that if the Olympic factor was stripped out then the Gross Domestic Product figure was only the same as the third quarter of last year.

This underlines the concerns of analysts who fear the Olympic bounce may not be sustainable and that the economy is still bumping along the bottom with growth relatively flat.

Mr Grice said that since 2008 GDP had fallen by 6.3% to the trough in the economy of 2009. However, since then there has been a slow recovery and since 2009 3.2% has been clawed back.

Hints of a return to growth had been made by David Cameron during Prime Minister’s Questions and the figures today mark the end of nine months of contraction in which the economy shrank 1.1%; a factor influenced by rising inflation and the problems in the Eurozone.

GDP is assessed as the sum of all goods and services produced in the economy.

Commenting on the figures, Richard Halstead, Midlands Region Director at EEF, the manufacturers’ organisation, said: “Output across manufacturing and the wider economy has mounted a strong rebound confirming that activity wasn’t lost, just displaced from the previous quarter. This has to be regarded as a positive development, given the disappointing data in the year so far.

“However, a true account of the UK’s economic performance has been skewed recently due to a series of one-off events, and this quarter is no different. The question is whether this first estimate is enough to signal an improvement in the underlying growth picture. With survey data, particularly in our major markets, pointing to difficult trading conditions in recent months, it’s unlikely this pace of expansion will be maintained into the New Year.

"As such, the pressure is still on for government to set out a clear vision of its economic priorities in the forthcoming Autumn Statement.”

Source : Duncan Tift - TheBusinessDesk.com
www.thebusinessdesk.com/westmidlands/news/388194-breaking-news-uk-emerges-from-recession.html?news_section=19009

25 October 2012
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