UK economy grew by 0.5% in Q3 2011, revised ONS estimates show

The UK economy continues to grow in 2011. Just.

The economy grew by 0.5% in the third quarter of 2011.

This is according to latest revised estimates on growth in gross domestic product (GDP), published by the Office for National Statistics (ONS) today (Thursday 24 November 2011).

This is unchanged from the preliminary estimate of 0.5% GDP growth for the third quarter, which was published on 1 November 2011. ONS said at the time that "there is no evidence to suggest that the riots in August had any significant impact on GDP for Q3."

The latest revised data from ONS show that GDP growth ran at 0.4% in the first quarter of 2011, falling back sharply to 0.1% in the second quarter.

Third-quarter growth is 'fastest since Q3 2010', says Reuters
Reuters says: "The figures in part mark a rebound from unusually weak growth in the second quarter, due to disruption from extra public holidays to mark a royal wedding, as well as from Japan' s tsunami, which hit supply chains." It notes that the 0.5% GDP growth rate in the third quarter of 2011 represents "the fastest pace of growth since the third quarter of 2010, but economists are unanimous that economic expansion is likely to slow rapidly, as Britain faces the headwinds of the euro zone debt crisis and ongoing government spending cuts."

Sunday Times Economics Editor David Smith gave his immediate response to the revised GDP data via Twitter. He said: "GDP rise confirmed at 0.5% in third quarter. No significant revisions to earlier headline numbers"

Weaker growth outlook for 2012
The fear now is that growth could be about to slow down dramatically - or even that the UK economy could be about to tumble back into recession:

• The Bank of England's latest quarterly Inflation Report suggested that growth might be expected to flatline in the opening quarters of 2012. The report suggests that UK GDP growth will come in at around 1% over 2012 as a whole.
  
• "[T]he risk of a recession has risen, [but] our forecast suggests that two consecutive quarters of negative growth will be avoided. However, it is likely that growth will almost stall over the winter." This is according to the CBI, which expects growth to come in at 0.9% for 2011 as a whole, and has cuts its expectations for UK GDP growth in 2012 from 2.2% to 1.2%. 

Next week see the publication of the Office for Budget Responsibility's (OBR) UK economic outlook report, on Tuesday 29 November. This report will set out the OBR's latest forecasts for UK economic growth. Chancellor George Osborne is scheduled to deliver his autumn statement that same day. Osborne is expected to use the autumn statement to announce a package of measures intended to boost economic growth.

ONS says that it will publish the full set of quarterly national accounts for the third quarter of 2011 just before Christmas, on Tuesday 22 December 2011. The preliminary estimate for economic growth in the fourth quarter of 2011 follows one month later, on Wednesday 25 January 2012.