Returning to the UK GDP growth is confirmed
July 12, 2010
UK recession was more severe than feared and the economy would have contracted in the first quarter of 2010 if the government had not spent much, show official figures released Monday.
The National Statistics Office has maintained its estimate of gross domestic product (GDP) rising 0.3% over the first three months of the year versus the fourth quarter 2009 and down 0.2% on one year, as anticipated by economists to Reuters.
The outlook for the second quarter are mixed, especially as the figures of production in services shrank 0.3% in April, the decline was the highest since January.
In the first quarter, government spending, which had not increased much since the last quarter of 2008, contributed 0.4 percentage points to GDP growth. The contribution of gross fixed capital formation (investment) was 0.9 percentage points.
This has offset the negative impact of 0.9 percentage points from net trade.
These figures suggest it will take a considerable rise in British exports to sustain growth at a time when the government of David Cameron plans to cut public spending.
"The depreciation of the pound failed to boost the British economy," said James Knightley, economist at ING."With the reliance has to austerity measures and slower growth in consumer spending, it is enough to feed concerns about the outlook for UK growth."
The pound has exacerbated its decline against the euro and the dollar after the publication of statistics while gilts futures erased their losses, investors felt that the figures of the day accrediting keeping the rent money at a level low for an extended period.
The ONS also confirmed the pace of quarterly growth of 0.4% in the fourth quarter of 2009.
It has however revised 6.4% contraction of the British economy between the second quarter 2008 and third quarter 2009, against 6.2% previously announced, wiping out two billion pounds extra for the British economy, a total of 22 billion pounds.
The ONS said that growth in early 2008 was lower estimated, which accentuated the decline that followed.
The ONS has finally delivered its estimates of UK current accounts for the first quarter, showing that the trade deficit in Britain with the rest of the world widened to 9.628 billion pounds over the last three months 2009, more than double what was expected, against a surplus of 521 million pounds over the last three months of 2009.
Sorry, comments for this entry are closed at this time.