LONDON (MNI) – UK output rose 0.6% in the three months to the
end of May from the previous three months, the National Institute of
Economic and Social Research said Friday.

The 0.6% growth rate compares to the 0.7% estimated for the three
months through April. NIESR said that this is the first real indication
that the economy is growing at around its trend rate.

“Obviously, we hope that the rate of growth will improve further
but there are a number of factors which will impede growth in the coming
months,” NIESR said.

“One is that the euro area may be adversely affected by the
spill-over from Greece’s debt crisis. Secondly, the United Kingdom has
recently lost competitiveness against the euro area as sterling has
risen. Thirdly, there are risks of renewed weakness to domestic demand
as the UK’s fiscal deficit is corrected,” NIESR said.

NIESR produces early quarterly estimates of GDP which, it says has
a standard error of 0.1%-0.2% point when compared to the first estimate
produced by the NS.

NIESR has acknowledged its GDP estimates are “likely to be less
accurate in the current disturbed economic circumstances.”

–London bureau: +4420 7862 7492; email: dthomas@marketnews.com

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