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UK spring surprise: economy expands 0.3% in first quarter

Friday, April 26th 2013 - 07:25 UTC
Full article 11 comments
“Today's figures are an encouraging sign the economy is healing” said Finance minister George Osborne “Today's figures are an encouraging sign the economy is healing” said Finance minister George Osborne

Britain has avoided falling into its third recession since the 2008 global financial crisis, after the economy grew by a better-than-expected 0.3% in the first quarter of 2013 compared with the final three months of last year, official data showed on Thursday.

In a major boost to Prime Minister David Cameron's coalition government, the Office for National Statistics revealed that British GDP expanded by 0.3% in the January-March period.

That marked a rebound from the fourth quarter of 2012, when the economy shrank by 0.3%, the ONS added in a statement.

The technical definition of recession is two successive quarters of contracting economic activity.

“Today's figures are an encouraging sign the economy is healing,” said finance minister George Osborne. “Despite a tough economic backdrop, we are making progress” the Chancellor of the Exchequer added in a statement.

In reaction to the impressive growth, the British pound rallied to a three-week high against the Euro and a two-month peak against the dollar.

The positive GDP figure comes after Fitch last week stripped Britain of its top triple-A rating, moving it down one notch to 'AA+' amid fears that the government's austerity program was hurting economic recovery.

The downgrade comes two months after rival ratings agency Moody's also stripped Britain of a triple-A debt rating, saying government debt was still mounting and that growth was too weak to reverse the trend before 2016. Downgrades can cause a country to pay higher interest for its debt.

The ONS added that Britain's economy expanded by 0.6 percent in the January-March period compared with the first quarter of 2012. Growth was driven by a solid services sector, which grew by 0.6% in the first quarter thanks to strong performance by the retail, hotel and restaurant industries. The production sector expanded 0.2%, while the construction industry slid 2.5%.
 

Categories: Economy, Politics, International.

Top Comments

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  • Britworker

    Good news, long way to go but definitely moving in the right direction finally! Thought it was funny that the B A Herald ran a big headline hoping we were going to dip into triple recession. No headline now I see that we are now showing stronger growth than Germany or France.

    Apr 26th, 2013 - 07:56 am 0
  • ChrisR

    And, British statistics are not bent like our friends (ha, ha) in the Dark Country.

    Good news.

    Apr 26th, 2013 - 01:16 pm 0
  • Brazilian

    Unlike many people here, I truly wish for all economies to do well, because it is the workers who always pay the price of economic crisis.

    Apr 26th, 2013 - 02:14 pm 0
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