The UK economy returned to positive growth in the third quarter of 2012, thereby ending the double-dip recession.
The UK economy grew by 1% in the third quarter of 2012. This is according to the preliminary estimate on growth in gross domestic product (GDP) published by the Office for National Statistics today (Thursday 25 October 2012).
ONS comments that the latest GDP reading was affected by "the impact of [recent] bank holiday changes] and [by the Olympics and Paralympics events in the third quarter."
ONS says it cannot quantify impact of Olympics on UK GDP growth
However, ONS is uncertain as to the precise extent of the 'Olympics effect' on GDP:
It is not possible to quantify the overall impact of the Olympics and indeed some of the activity may have displaced other activity (for example, the comments on watching the Olympics in preference to films or DVDs).Latest GDP figures 'should not be taken as a sign that a strong recovery is on the way,' says Work Foundation
Andrew Sissons of the Work Foundation comments:
This growth figure is heartening, but it does little to change the overall impression of a flat UK economy. The economy remains smaller today than it did this time a year ago, and that should be a serious cause for concern. While this quarter's growth corrects for the shallow double-dip recession, it should not be taken as a sign that a strong recovery is on the way.Triple-dip recession remains a risk
Despite today's welcome news of a return to growth, concerns remain that the UK economy could relapse into recession in the near future.
Some economic commentators fear that a triple-dip recession could be just around the corner.
Indeed, the view that any economic boost from the London 2012 Olympics and Paralympics will prove to be a blip is shared by a majority of economic commentators, as XpertHR's October 2012 round-up of GDP forecasts finds.
- XpertHR economic commentary October 2012: A lack of oomph
XpertHR's economic commentary for October 2012 report on the following topics: the national minimum wage uprating for 2012/2013; the Government's new strategy to reboot the UK economy and what might be expected from the Chancellor's Autumn Statement 2012. We also consider trends in trade union activity in 2012 and beyond, and report the latest readings on key economic indicators of relevance to HR practitioners and pay specialists, including inflation, unemployment and pay awards.