The threat of a triple-dip recession in the United Kingdom has gone away, although gross domestic product (GDP) growth is so small that the discussion is a matter of semantics.
The Office of National Statistics reported on preliminary U.K. GDP:
- GDP increased by 0.3% in Q1 2013 compared with Q4 2012. GDP was 0.4% higher in Q1 2013 than in Q3 2011 and therefore has been broadly flat over the last 18 months.
- By far the largest contribution to Q1 2013 GDP growth came from services; these industries increased by 0.6% contributing 0.47 percentage points (pp) to the 0.3% increase in GDP.
- There was also a small upward contribution (0.03pp) from production; these industries rose by 0.2%, largely due to mining & quarrying, which increased by 3.2% following a weak Q4 2012 when extended maintenance in the North Sea reduced output.
- These upward contributions were partially offset by construction; these industries fell by 2.5%, reducing GDP growth by 0.17pp.
The news will not stop the debate over whether the government’s ongoing push for austerity has ruined any chance for growth of GDP. As is true throughout the European Union, United States and Japan, the proponents of stimulus argue that without aide, none of these troubled economies will enter a phase of strong recovery.