UK avoids triple dip recession
THE UK has avoided an unprecedented triple dip recession after official figures showed output grew by 0.3% in the first quarter of the year.
This followed a 0.3% contraction in the final three months of 2012. A recession is officially defined by two consecutive quarters of negative growth.
The Office for National Statistics (ONS) said the biggest contribution to gross domestic product growth was from the service sector where there was 0.6% growth.
There was also an upward contribution from production industries such as mining and quarrying. But this was offset by the sluggish construction industry which contracted by 2.5%.
The ONS said snow and cold weather had a limited impact on the figures. It did reduce retail output in January and March but increased demand for electricity and gas.
Joe Grice, chief economist at the Office for National Statistics, said the UK was making a slow, patchy recovery: “There is some growth, but it’s quite shallow and quite bumpy from one quarter to the next.”
Dr Brian Sloan, Chief Economist at Greater Manchester Chamber of Commerce, said: “The growth figure today is very welcome news that will help maintain confidence amongst business and consumers, though conditions remain broadly flat.
“However it is the service sector that continues to drive growth and, as a result, we expect that Greater Manchester’s economy will continue to perform better than some other parts of the country.”
Many economists predicted marginal first quarter growth but Chancellor George Osborne is still under great pressure to revive the faltering economy.
Last week the International Monetary Fund urged the Treasury to consider scaling back the austerity programme because of weakness in the economy.
The economy has been hobbled by weak demand from a recession-hit euro zone, a drag from the government’s deficit-reduction measures and high inflation eating into meagre wage rises. Furthermore, the global economy is weakening and there are signs of slowing growth in the US and China.
This series of three recessions began in the second quarter of 2008. The economy grew again in the third quarter of 2009 and growth continued, barring a blip at the end of 2010, until the fourth quarter of 2011. Output shrank again and continued to do so through the first half of 2012. Growth returned in the third quarter.
