The UK Economy Grows by 0.5% in the First Three Months of 2011

The estimates of the Office for National Statistics reveal that the economic activity has recovered from the 0.5% contraction recorded for the last three months of 2010. The news brushes away fears of a so called double dip recession.

Apart from this, The Independent Office for Budget Responsibility (OBR) had also forecasted a growth of 0.8% for the first three months of this year.

It is encouraging to note that the activity in both the manufacturing and service sectors has increased during the first three months of the year, however, the construction, one of the worst hit areas in the last quarter of 2010 was down again by 4.7%.

However, economists was sceptical of the fact that a growth rate of less than 1% in the first quarter would be disappointing and would raise concerns as to the economy’s ability to withstand the coalition government’s austerity measures.

However, the opinion of the economists is mixed. David Kern, the chief economist at the British Chambers of Commerce (BCC), said: “These figures were mixed and well below the OBR prediction that the economy would grow by 0.8% in the quarter”. The main fear among the economists is that the growth is not sufficient enough to support the repressive measures of the government to bring down the deficit.
Source; bbc.co.uk

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