British economic growth slows: institute

12th May 2011, Comments 0 comments

Britain's economic growth slowed at the start of the second quarter, with the three-month rate dropping to 0.3 percent, a respected think tank said Thursday.

"Our monthly estimates of GDP suggest that output grew by 0.3 percent in the three months ending in April after growth of 0.5 percent in the three months ending in March," the National Institute of Economic and Social Research (NIESR) estimated in its latest report.

The estimated rate will make uncomfortable reading for Britain's Conservative-led coalition government which is seeking to show that its deficit-cutting austerity measures are helping revive the economy.

On Wednesday, the Bank of England revised down its forecast for gross domestic product (GDP) growth this year to 1.7 percent from a February forecast of 2.0 percent.

The central bank also warned that British inflation could reach 5.0 percent this year because of soaring domestic energy costs and the government's sales tax rise.

The NIESR did at least proclaim that "the recession is over", though it added the proviso "unless output turns down again".

However a "period of depression is likely to continue for some time. We do not expect output to pass its peak in early 2008 until 2013", it added.

The institute predicted full year economic growth of 1.4 percent.

According to the official figures Britain's GDP growth hit 0.5 percent in the first quarter of this yearm following a fall of similar proportions at the end of 2010.

© 2011 AFP

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