By Richard Johnstone | 22 December 2011
The UK economy grew quicker in the third quarter of this year than previously thought, the Office for National Statistics has said today.
The ONS now says that gross domestic product increased by 0.6% between July and September this year, up from last month's 0.5% estimate.However, growth for the year to date is unchanged for the year, at 0.5%, as the estimate for second quarter growth has been revised down to zero.
This is the second downwards revision for that quarter – growth in April to June was originally estimated to be 0.2%.
The upwards revision of the latest figure represents ‘a Christmas gift for the British economy’, Tim Ohlenburg, senior economist at the Centre for Economics and Business Research said. But growth remained ‘lacklustre’, he added.
‘The disappointing performance of the UK economy becomes even clearer when considering that output was 3.8% lower in the third quarter of 2011 than at the pre-crisis peak in the first quarter of 2008.
‘An alternative definition of recovery from a recession is that the recession is over when the economy has reached its previous peak level of output. We estimate that it will take until the first quarter of 2015 for output to climb back to this level. In other words, after three and a half years the UK has only reached the middle of its seven lean years that follow the fat financial boom years.’
He noted that today’s figures showed that household incomes rose slightly in the third quarter, by 0.3% compared to the year before, but most of this was then put away as savings.
‘Households are thus keeping up their debt reduction
efforts, mirroring the public sector. In this environment of general
deleveraging, strong growth is out of the question.’
The revision of the figures comes as a survey reveals that less than one
in ten Britons expect their local economy to improve in the first six months of
next year.
The poll by Ipsos’ Global Advisor, conducted
in 24 countries, reveals residents of only four other countries are more
pessimistic about the economy than those in the Britain. People in France are
the most pessimistic, with only 2% of people expecting local economic
improvement.
Ipsos Mori managing director Bobby Duffy said that the survey revealed a ‘stark
difference’ between some high-confidence European countries, like Sweden and
Germany, and low-confidence countries like the UK and France.
‘The UK ends the year much as it started - bumping along the bottom of the international confidence table. This adds to the picture of a gloomy 2012, as we know consumer confidence has a direct relationship with real economic outcomes,’ said Duffy.
