FIGURES REVEAL UK HAS EMERGED FROM DOUBLE-DIP RECESSION
The UK economy has emerged from double-dip recession, according to figures released on 30 October by the Office for National Statistics (ONS).
During the three months from July to September, the official gross domestic product figures (GDP) shows that the UK economy grew by 1%. The economy had been in recession for the previous nine months before these latest figures, but the levels of output have still not recovered to the levels seen prior to the beginning of the financial crisis in 2008.
Following the announcement, the chancellor of the exchequer George Osborne used the 1% growth as evidence that his policies have worked, and that the economy is "on the right track". The chancellor added: "There is still a long way to go go, but these figures show we are on the right track. This is another sign that the economy is healing and we have the right approach".
However, the ONS highlighted that the GDP growth had enjoyed an artificial boost due to the Olympic and Paralympic Games and the "bounce back" from June's extra Bank Holiday for the Queen's diamond jubilee. Olympic ticket income was included in economic output in the third quarter, with the ONS stating that it is believed that ticket sales alone may have added 0.2% to GDP.
Labour responded to the figures by questioning whether they were a true sign of sustained recovery. Rachel Reeves, shadow secretary to the Treasury said: The question is what the underlying growth rate of the economy is when we strip out the one-off Olympics and Bank Holiday effects.
"A one-off boost from the Olympics is no substitute for a long-term strategy and should bot breed yet more complacency from David Cameron and George Osborne."
Despite the growth, Osborne remained cautious. "Yesterday's weak data from the eurozone were a reminder that we still face many economic challenges at home and abroad," he said.
The figures released on 30 October were only an early estimate, but it is believed that the construction sector suffered a 2.5% decline in the third quarter, while distribution, hotels and restaurants (1.6%), transport (0.8%) and business services and finance (1%) all expanded.
Osborne added: By continuing to take the tough decisions needed to deal with our debts and equip our economy for the global race we're in, this government is laying foundations for lasting prosperity."
Chris Williamson, of the data provider Markit, said: The government will most likely make the most out of this good news, but unfortunately it is unlikely that the UK will see such a strong performance again for some time.
"There is a real risk that a return to contraction might be seen again in the fourth quarter."
Osborne is due to deliver his autumn statement on 5 December.
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