The UK economy continued to recover from recession in the first three months of the year, according to official estimates.
GDP grew by 0.2% between January and March, the Office for National Statistics (ONS) said. That was weaker than the 0.4% growth predicted by many economists, but the figure may be revised. The last quarter of 2009 saw GDP growth of 0.4% - revised up from an initial estimate of 0.1%.
The ONS said the bad weather seen at the beginning of the year may have had an impact on output - particularly in the retail and industrial sectors. But despite that, manufacturing output grew by 0.7% over the quarter, while the utilities sector saw output rise by 2.5%. (source BBC)
So this is somewhat good news, perhaps not as good as we'd hoped especially as it indicates that GDP growth has slowed. But being typically British we are blaming the weather.
The problem now facing the Bank of England is that if inflation does not fall back under 2% sometime soon then they face the prospect of having to raise interest rates sooner rather than later. Given this latest GDP data, early rate rises could potentially derail the economic recovery perhaps indicating that sharp interest rate rises are not on the cards in the immediate future?
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