Britain emerges from recession with 1% economic growth
The British economy has been able to remove itself from the long-lasting double-dip recession in the third quarter of the year, when GDP grew by 1% helped by Olympic ticket sales and the Diamond Jubilee.
The growth is welcome news to the politicians and the public after Britain has been brought to a standstill over consecutive quarters of economic contraction as the economy has been hit by the recession in the Eurozone as well as less spending by business organizations and consumers who were unsure when the economy might see growth.
Nevertheless, the growth in the economy in the third quarter was expected and most economists predicted growth by 0.6% thanks to the Olympic Games and a rebound from a second quarter reading that consisted of the additional bank holiday for the Queen’s Jubilee.
Apart from the ticket sales, the Office for National Statistics (ONS) said the “Olympic effects that helped produce the fastest quarterly growth for five years boosted employment, accommodation, transport and retail.”
However, today’s figure is the first of three readings from the ONS, each of which can change as they take more data into account.
Despite the good news about the growth, many economists warned that the UK economy’s fundamental weakness remains.
Chris Williamson from the data company Markit has said that “business survey data suggest that the economy’s underlying quarterly growth trend over the past two quarters has been more like 0.1 – 0.3%”.
Alan Clarke, an economist at Scotiabank, further cautioned that the figure could get revised lower, but he concluded that: “There is a very good chance that UK GDP growth for 2012 might find itself on the right side of zero. It is a close call, but we suspect that the UK avoided a contraction for the year as a whole.”
The figure provides the Coalition Government of Britain with a chance to argue that their plan to save the economy is working, and that Labour’s plan to stop cutting and start spending instead, would only harm the progress made. However, there is still much to do as David Cameron has admitted himself through the use of Tweets: “These GDP figures show that Britain may be on the right track, and our economy is healing.”