UK expected to avoid triple-dip recession

The UK is expected to narrowly avoid a triple-dip recession with keenly awaited figures due Thursday, however, there was little cheer amid warnings the UK was a "crisis economy".

According to most analysts, gross domestic product (GDP) was up by 0.1 per cent in the first three months of the year, which would mean the economy avoided a return to recession for the third time since 2008 following a 0.3 per cent slump in output at the end of last year.

However, experts caution it would be a very close-run result following a volatile start to 2013 after January and March snowstorms and continued pressure in the construction sector.

Fears were also stoked by remarks of incoming Bank of England governor, Mark Carney after he labelled the UK a "crisis economy" alongside stricken eurozone countries and Japan.

A similar assessment also came from the fringes of the International Monetary Fund's (IMF) Washington meeting, with IMF chief Christine Lagarde also voicing concerns over the UK economy, saying its growth numbers were "not particularly good".

The IMF only recently cut UK growth forecasts from 1 per cent to 0.7 per cent for 2013 and 2014's projection from 1.9 per cent to 1.5 per cent as it said the private sector was being hampered by a lack of credit and economic uncertainty.

Meanwhile, though the wait to find out if the UK economy slipped into a triple-dip recession was over this week, with official GDP data to be out Thursday, forecasters remained split over whether the UK economy managed to eke out some growth in the first quarter of this year or contracted again.

A Reuters poll consensus forecast indicated a miniscule  0.1 per cent quarter-on-quarter uptick, though predictions ranged from a 0.2 per cent drop in GDP to a growth of 0.3 per cent.

According to the Office for National Statistics (ONS) the economy slipped by 0.3 per cent in the fourth quarter. Meanwhile, Thursday would be statisticians' first take of three for the first quarter and economists warn that numbers, as also data for previous quarters, could well undergo revision up or down.

However, if the figures did show two successive quarters of contraction from the beginning of October to the end of March it would mark a triple-dip recession not seen earlier in living memory.

Also many economists warned that whether the UK officially slipped into a triple-dip or not was a trivial detail that distracted from the bigger picture of an economy under pressure from squeezed consumers, an austerity drive and struggling industry.