LONDON – Britain’s economy emerged from its nine-month recession in the July to September quarter, when spending on the Olympics helped it grow by a bigger than expected 1 per cent, according to official figures released Thursday.
The number published by the Office for National Statistics beat the market consensus forecast of 0.6 per cent growth and will make the Bank of England less likely to approve a further round of economic stimulus in November, analysts say.
The ONS said the result was the strongest quarterly growth in five years, bringing economic output back to the same level of a year ago. It is a first estimate and is subject to revision.
Prime Minister David Cameron, in a message on Twitter, said there was still much to do “but these GDP figures show we are on the right track, and our economy is healing.”
The statistics agency says the Olympic Games and Paralympic Games probably gave the economy a boost but it gave no estimate of the total impact.
It did say that sales of Olympic tickets that occurred in 2011 and earlier in 2012 — the ones it statistically allocated to third-quarter economic output — accounted for 0.2 points of the rise in GDP.
Increased activity by employment agencies, the entertainment sector and accommodation was likely boosted by the Olympics and Paralymics, the ONS said.
“As the Olympic effects unwind, it is still possible that the economy contracts again in the fourth quarter,” said Vicky Redwood, chief UK economist at Capital Economics.
The dominant services sector, which shrank by 0.1 per cent in the second quarter, led the rebound with 1.3 per cent growth. Production industries including manufacturing grew by 1 per cent but construction activity fell 2.5 per cent, the ONS said.
Thursday, October 25, 2012