Industry NewsThe UK has continued to see economic growth in the latest estimates from the Office of National Statistics (ONS). However, the scale of growth remains slight and there are risks that the UK – if not Europe – could slip back into recession. The latest estimates also indicated that they included a sharp drop in consumer spending, which has yet to recover.
The latest update covers the third estimate of Q1, 2011 and shows a 0.5 per cent increase in Gross Domestic Product (GDP). This was the same figure presented in the last estimate, but each update provides improved data sets, making the figure firmer. The increase follows a drop in the previous quarter and if the Q1 information had also been down then the UK would have officially been back in recession. The third update indicated that consumer spending had dropped 0.6 per cent and manufacturing output was cut from the last update.
However, construction was revised up. The ONS underlined that a large part of the reason for the increase was the end of the abnormally cold and snowy weather which had impacted on output in the final quarter of 2010.
David Kern, British Chambers of Commerce, responded to the data saying, "The outlook for the economy remains uncertain. While we expect GDP growth in the second quarter of the year to remain in positive territory, the pace of expansion is likely to be slow for some time. We are starting to feel the effects of the Government's austerity measures, and lost working days in April could also have dampened economic activity. With consumers feeling the pressure, it is clear that Britain's future growth depends on a strong rebalancing towards exports and investment. There are signs that this is happening, but the Government must reinforce these trends by empowering private sector firms to create jobs and growth."