UK escapes triple-dip recession, returns to growth in Q1
The UK economy avoided a triple-dip recession as the GDP grew at a faster-than-expected 0.3 percent rate in the first quarter of 2013, powered by its service sector.
London: The UK economy avoided a triple-dip recession as the GDP grew at a faster-than-expected 0.3 percent rate in the first quarter of 2013, powered by its service sector.
The Office for National Statistics (ONS) said Thursday that Britain's gross domestic product rose 0.3 percent in the first quarter of 2013, more than the 0.1 percent increase forecast by experts.
The growth in GDP would mean the economy avoided two consecutive quarters of contraction. There had been fears the UK would enter recession for the third time in five years, a so-called triple-dip recession.
"Thursday's figures are an encouraging sign the economy is healing. Despite a tough economic backdrop, we are making progress. The deficit is down by a third, businesses have created over a million and a quarter new jobs, and interest rates are at record lows," Chancellor George Osborne said.
The growth, which is seen as a minor victory for Osborne and his tough austerity measures, was powered by a relatively robust performance from the UK's services sector that expanded by 0.6 percent on the previous quarter.
"We all know there are no easy answers to problems built up over many years, and I can't promise the road ahead will always be smooth, but by continuing to confront our problems head on, Britain is recovering and we are building an economy fit for the future," the Chancellor said.
However, business secretary Vince Cable sounded a note of caution amid the general feeling of relief.
"Thursday's figures are modestly encouraging and taken alongside other indicators such as employment figures, suggest that things are going in the right direction.
"However, there is still a long way to go and some serious issues such as the systemic lack of bank lending to SMEs, the weakness in the construction sector and the need to press further on trade and exports. These issues all need to be addressed before people feel like the economy is genuinely starting to recover," Cable said.