The UK economy grew by 0.5% in the first three months of 2011, according to the Office of National Statistics (ONS).
The growth represents a recovery from the 0.5% contraction the economy experienced in the last quarter of 2010, though chancellor George Osborne has cautioned that “we are not out of the woods yet”.
The figures were also well below the 0.8% growth predicted by the Office for Budget Responsibility (OBR).
David Kern, chief economist at the British Chambers of Commerce (BCC), called the data “mixed” and said:
“On the basis of these figures, we reiterate our forecast that in 2011 as a whole GDP is likely to grow by 1.4%, much lower than the OBR’s expectation of a 1.7% increase.
“There are some positive features in these figures, particularly the 1.1% growth in manufacturing and the 0.9% increase in services. But construction fell sharply for a second quarter in a row and the economy’s overall performance is still mediocre.”
The ONS figures make it likely that the Bank of England will postpone any rise in interest rates until later in the year.
© Crimson Business 2011