UK economy: Is it slowing down again?

8th July 2011

The National Institute of Economic and Social Research has said UK economic growth, as measured by gross domestic product, slipped from 0.5% in the three months to May to 0.1% in the three months to June.

The Guardian reports that "the figures suggest almost 10 months of zero growth in the UK as each surge is largely cancelled out by contraction or near-contraction in the following months."

Although fears of a double-dip recession have subsided "the Treasury now has to show it can maintain growth while imposing the toughest curbs on public spending in 40 years".

The Financial Times (paywall) reports the Office for National Statistics reported that manufacturing output  actually rose 1.8 per cent in May from April, a significantly bigger bounce than economists had expected.

The rise more than offset a 1.6 per cent fall in April when production days were lost because of an unusually late Easter and a holiday for the royal wedding.

The ONS itself pointed out that in addition to the royal wedding, the after-effects of the tsunami in Japan disrupted supply chains in the manufacturing sector.

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