–Says Cold Weather, VAT Hike May Have Dampened Q1 GDP
–Says Output Now 1.1% Above Level Seen At Recession End
LONDON (MNI) – UK GDP rose by 0.4% in the first quarter, unchanged
from the latest official estimate for the fourth quarter, according to
the latest estimates from the National Institute of Economic and Social
Research.
The Bank of England’s latest Inflation Report showed it expecting a
more rapid rate of growth in Q1, of around 0.7% on the quarter. NIESR
said the underlying rate of growth in Q1 was probably stronger than 0.4%
as Q1 output had been hit by the exceptionally poor weather in January.
“These data reflect a dip in output in January which we associate
with the cold weather. Given this dip in January and the fact that the
growth rate was achieved despite the rise in the VAT rate, the
underlying rate of growth of the economy is probably greater than 0.4%,”
NIESR said.
“We now estimate that output is 1.1 per cent higher than at the end
of the recession which we currently place in September 2009,” it said.
–London bureau: +4420 7634 1624; email: dthomas@marketnews.com
[TOPICS: M$B$$$,M$BDS$,MT$$$$,M$$BE$,MFBBU$]
