UK economy leads Europe

| October 26, 2012
UK economy leads Europe

The UK economy emerged from recession yesterday and now leads the way in Europe according to research group Capital Economics.

Gross Domestic Product (GDP) grew by one per cent in the third quarter from July to September, the biggest rise for five years, the latest official figures from the Office for National Statistics (ONS) show.

Olympic ticket sales are believed to have contributed 0.2 per cent to the figures.

However, when factors which affected GDP in the second and third quarters, such as the Jubilee bank holiday, are taken out, underlying growth in the third quarter is estimated at a more modest 0.3 per cent.

The services sector, which accounts for two-thirds of the total economy, grew by 1.3 per cent during the third quarter, but the construction sector shrank by 3 per cent.

Despite the positive figures, the government has warned that a triple dip recession is still a risk.

Danny Alexander, the Chief Secretary to the Treasury, said: “We shouldn’t get carried away.

There is still a long, hard road back to economic strength.”

On a more optimistic note, Capital Economics suggests that the UK economy will outstrip the rest of Europe until at least 2015.

The group reports that the UK was the strongest performing major economy in the world in the third quarter.

Both Germany and the United States are estimated to have grown by just 0.3 per cent in the quarter, while a decline of 0.4 per cent is expected in France.

Samuel Tombs, an economist at Capital Economics, said: “The latest GDP figures suggest that the UK economy is emerging from recession at the same time that the eurozone is entering one.

“But the economic recovery still lags significantly behind the pace seen in the US.”

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