Triple-dip recession avoided by the UK economy

Whilst the figures, released this month from the Office for National Statistics (ONS), reflected a flat economy, they were better than many expected. The ONS also commented that there were no extraordinary contributing factors, such as the Olympics, to flatter these figures.

They added that the first quarter figure of 2013 had risen by 0.6% compared with the same period in 2012; this is its strongest performance since Q4 of 2011.

The service sector led the increase in productivity, with retail, hotels and restaurants performing well. The energy sector also contributed positively, with increased North Sea oil and gas production. Overall this sector saw growth of 0.6%.

Telecommunications and transport also contributed positively with growth of 1.4%.

On the negative side, construction, with a dip of 2.5%, and manufacturing also saw a decline in output to slightly dent the overall figures.

Given the negative comments made recently by the International Monetary Fund and a downgrading of the UK’s AAA credit rating by another of the agencies, George Osborne, the Chancellor of the Exchequer, said of the ONS announcement: “Today’s figures are an encouraging sign the economy is healing. Despite a tough economic backdrop, we are making progress. The deficit is down by a third, businesses have created over a million and a quarter new jobs, and interest rates are at record lows.

“We all know there are no easy answers to problems built up over many years, and I can’t promise the road ahead will always be smooth, but by continuing to confront our problems head on, Britain is recovering and we are building an economy fit for the future.”

As a caveat, UK economic output remains 2.6% below its pre-financial crisis level.