UK economy sees 0.5% growth in 2011

The 0.5% figure is heartening, but a far cry from the growth necessary to pull the UK economy firmly away from a double dip recession.

According to the ONS, we're back at ground level, following the decrease of 0.5 per cent in the fourth quarter of 2010: the drop caused by the big freeze at the end of last year. 

Interestingly, the largest contribution to the growth in this quarter was from business services and finance.

Here are the full statistics:

  • Business services and finance increased by 1.0 per cent, compared with a decline of 0.8 per cent in the previous quarter. Other business services contributed most to the growth in this quarter.
  • Transport, storage and communication increased by 2.7 per cent, compared with a decrease of 1.7 per cent in the previous quarter. Post and Telecommunications contributed most to the growth in this quarter.

  • Government and other services increased by 0.7 per cent, compared with a 0.1 per cent decline in the previous quarter. Health contributed most to the growth this quarter.

  • Distribution, hotels and restaurants increased by 0.3 per cent, compared with a decrease of 0.2 per cent in the previous quarter. Hotels and restaurants contributed most to the growth in this quarter.

Manufacturing, too, is on the rise. Total production output rose 0.4 per cent in the first quarter of 2011, compared with an increase of 0.8 per cent in the previous quarter. Progress in this sector is slow but it is steady.

Stephen Archer, business analyst and director of Spring Partnerships says: "The collection of bad news in the early part of 2011 including low growth, high inflation, very high fuel costs, VAT rising and the tsunami all undermined confidence within the UK economy both on the supply and demand side.

"However, this was a collective blip and it's good to see that growth is now showing signs of heading back to deliver the 2% that I forecast for 2011.

"None the less, there is a lot of work to do and the economy needs to see wider signs or being re-balanced. I remain cautiously optimistic."

Read more from Smarta columnist Stephen Archer:

GUEST BLOG: Stephen Archer on the decline of the US economy

GUEST BLOG: What does 2011 have in store for small businesses?


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