UK economy grew full 1 % in third quarter

The Office for National Statistics (ONS) has confirmed that the UK economy clocked a growth of full 1 per cent in its second estimate of GDP for the third quarter. Though another revision is due, which means there could still be a change, the data from ONS confirmed that the UK had emerged from its double-dip recession, though the economic outlook remained difficult.

The second estimate showed that the economy contracted by 0.1 per cent as against the year before, while the first estimate suggested the economy was flat. The final confirmation would be out next month when all of the economic data was in and a more complete picture of household spending emerged.

As it stands this comes as the biggest quarterly rise in GDP for five years but the economy was still 3.1 per cent below its peak level of activity in the first quarter of 2008.

According to the ONS, the GDP's rise was helped by the biggest increase in consumer spending for two years but with inflation rising there were concerns that this could be short-lived. The run-up to Christmas would be vital to see if the trend continued in the final quarter of 2012.

Concerns had been voiced that the service sector figures could undergo a downward revision, thus pushing the rise in GDP back from 1.0 per cent. It was confirmed though that the growth of the services sector had been 1.3 per cent, which was the biggest quarterly increase for two years.

The industrial output though was worse than stated previously shrinking 1.1 per cent rather than 0.9 per cent. Further there was a slight drop in output from the construction sector.