InvestmentsMay 10 2013

Data hint at UK return to healthy economic growth

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The UK’s economy grew by 0.8 per cent in the three months to end-April, according to a leading economic research firm, in a sign that months of stagnation could be coming to an end.

The National Institute for Economic and Social Research (Niesr) said the economy had also grown by 0.3 per cent in the three months to end-March 2013.

It comes after the UK’s official statistics body the ONS last week estimated that the economy had escaped a ‘triple-dip recession’ with first-quarter growth of 0.3 per cent.

Also last week improvements in services, manufacturing and construction data helped to fuel rallying sentiment towards the domestic economy.

However, Niesr this morning cautioned that “underlying growth” is actually weaker than its 0.8 per cent headlnie figure suggests, owing to technical factors.

“The base effect from the weak level of output in the January 2013 has inflated the quarterly rate of growth in both the production sector and broader economy in the three months to April 2013,” it said.