NIESR: UK GDP to be revised upwards

| May 11, 2010 | 0 Comments

Influential think tank, the National Institute of Social and Economic Research (NIESR) said the UK economy expanded by 0.5% in the three months to April.

The Institute is expecting the Office for National Statistics (ONS) to upwardly revise its initial first quarter growth estimate.

Last month, the ONS said the economy grew by just 0.2% in the first three months of 2010 – just half analysts’ expectations of 0.4%.

Today, however, it was revealed that UK industrial output grew by 2% in March compared with February – far exceeding analyst expectations of a 0.3% rise.

As a result, it is estimated that today’s figures will add 0.1 percentage points to the UK’s first quarter growth.

Meanwhile, returning to the NIESR, it believes a competitive exchange rate boosted the economy in the early part of 2010.

According to Martin Weale of the NIESR: “The competitive situation in which the UK economy finds itself following the exchange rate adjustments of the last two years is beginning to have a favourable effect on output.”

A weak pound traditionally makes UK goods and services much more attractive for foreign buyers.

However, Mr Weale cautions that the recovery remains fragile.

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