British economy grows 0.5% in third quarter

1st November 2011, Comments 0 comments

Britain's economy recovered in the third quarter to show growth of 0.5 percent, accelerating from 0.1-percent growth in the second quarter of 2011, official data showed on Tuesday.

Gross domestic product (GDP) growth between June and September also grew by 0.5 percent compared with output in the third quarter of 2010, the Office for National Statistics said in a statement.

Britain's recovery was aided by stronger output for the manufacturing and service industries, which helped to offset contraction in the construction sector, the ONS added.

"Gross domestic product rose by 0.5 percent in the third quarter of 2011, driven by strength in the services sector in particular and the production sector. The construction sector showed a small decline," the office said.

Despite the better-than-expected headline GDP data, analysts said the outlook for Britain's economy remained bleak as the country comes up against high inflation, government cutbacks and the eurozone debt crisis.

The figures "do not alter our view that the economy is likely to fall back into recession over the coming quarters," said Capital Economics analyst Jonathan Loynes.

"There is a good chance that the economy will contract in the fourth quarter. And against a background of high inflation, the ongoing fiscal squeeze and the escalating eurozone crisis, we still see the economy stagnating in 2012 -- or worse," added Loynes, the consultancy's chief European economist.

© 2011 AFP

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