THE longest double-dip recession since the 1950s will be declared over by official figures today amid warnings about the underlying health of the economy.
Gross domestic product (GDP) – a broad measure for the total economy – is predicted by City experts to have grown 0.6% between July and September, ending three consecutive quarters of declining output.
But the bounce-back in the third quarter will be largely driven by one-off factors, such as clawed-back activity lost to the extra bank holiday for the Queen’s Diamond Jubilee and a slight lift from the Olympics.
But looking through the “distortions“, some economists have warned the UK is far from out of the economic woods and can expect growth to slow in subsequent quarters.
Economic indicators, such as purchasing manager surveys, suggest the manufacturing and construction sectors remained weak throughout the period, although the powerhouse services sector should deliver a robust performance.
Howard Archer, chief UK and European economist at IHS Global Insight, warned any recovery was looking “fragile, feeble and far from guaranteed“.
“Looking through the distortions to GDP in the second and third quarter, the likelihood is that the economy is eking out limited growth,” he added.
The economy shrank by 0.4% in the second quarter, according to the ONS, which was revised up gradually from an initial estimate of a 0.7% decline.
The UK has been battling against sluggish consumer spending, Government cuts and high unemployment, while the struggling eurozone has hit exports.