GDP Boosted by Olympics But Outlook Gloomy

GDP Boosted By Olympics But Outlook Gloomy


Figures for the UK economy are expected to show growth but experts warn the recovery looks "fragile and feeble".


7:22am UK, Thursday 25 October 2012



Video: Growth is expected to be weak despite boost from Olympics
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Gallery: State Of UK Economy: Region By Region



The longest double-dip recession since the 1950s is expected to be declared over when official figures are released this morning.

However, economists are warnings about the underlying health of the economy.

Gross domestic product (GDP) - a broad measure for the total economy - is predicted by City experts to have grown 0.6% between July and September, ending three consecutive quarters of declining output.

But the bounce-back in the third quarter will be largely driven by one-off factors, such as clawed-back activity lost to the extra bank holiday for the Queen's Diamond Jubilee and a slight lift from the Olympics.

But looking through the "distortions", some economists have warned the UK is far from out of the economic woods and can expect growth to slow in subsequent quarters.

Howard Archer, chief UK and European economist at IHS Global Insight, warned any recovery was looking "fragile, feeble and far from guaranteed".

The figure, published by the Office for National Statistics (ONS), is a preliminary estimate based on the output side of the economy and is subject to revisions.

The economy shrank by 0.4% in the second quarter, according to the ONS, which was revised up gradually from an initial estimate of a 0.7% decline.

The UK has been battling against sluggish consumer spending, Government cuts and high unemployment, while the struggling eurozone has hit exports.

Even though underlying growth is considered to be weak, analysts said the recovery has been helped by lower inflation, recent gains in employment and an edging up of earnings growth.

The economy is also expected to continue growing in the fourth quarter from October to December but at a much slower rate, with predictions coming in around the 0.3% mark.

The Bank of England is expected to pump further emergency support into the economy next month through its quantitative easing programme, which hit £375bn in July.

A family owned firm Crockett & Jones makes shoes and is doing very well, thanks in part to the shoes worn in the latest James Bond film which has increased demand. The Firm needs to recruit more staff but it is a specialised job and takes time.

Who would have thought it, cinemagoers would be so impressed with the shoes to want to buy them.!!!