–Adds Treasury Reaction To Version Transmitted At 1500 GMT
LONDON (MNI) – UK output rose by 0.1% in the three months through
December, the National Institute of Economic and Social Research said
today.
NIESR said that this put growth for the whole of 2011 at 1.0%,
compared with 2.1% in 2010. The latest data are in line with other
surveys and data releases which show that the economy is broadly
stagnating.
Some analysts have predicted a small contraction in Q4 growth, but
if the NIESR prediction proves to be right, at least the UK is likely to
avoid a technical recession.
The estimate follows the release of weak manufacturing and
industrial production data by National Statistics this morning. The
November industrial production data showed a fall of 0.6% on the month
following a 0.9% fall in October.
Even if industrial production bounced back strongly in December
output looks likely to knock 0.1 to 0.2 percentage points of quarterly
Q4 GDP growth.
The Treasury gave a cautious welcome to the news NIESR believes the
UK is still expanding, albeit only just.
“It is welcome news that NIESR are estimating continued growth in
the economy and there are reasons to be optimistic: business surveys
showed the UK service and construction sectors strengthening at the end
of 2011, and the Government’s credible fiscal plan is helping keep UK
interest rates at record lows,” a Treasury statement said.
“But we have to remember this is one estimate from one forecaster,
and we should be realistic about the risks; the uncertainty in the euro
area continues to have a chilling effect on the UK as well as
elsewhere,” it added.
–London bureau: +44207862 7492; email: dthomas@marketnews.com
[TOPICS: M$B$$$,M$BDS$,MT$$$$,M$$BE$,MFBBU$]