Economy bounces back with a bang

Economy bounces back with a bang

The Chancellor says the UK economy is 'on the right track'

The Chancellor says the UK economy is 'on the right track'

First published in National News © by

The UK climbed out of the double-dip recession with a bang between July and September as the economy returned to growth at its fastest pace in five years, official figures showed.

Gross domestic product (GDP) - a broad measure for the total economy - grew 1% in the third quarter of the year, the Office for National Statistics (ONS) said, ending three consecutive quarters of declining output.

City experts had expected a rise of 0.6%. The actual figure is the biggest increase since the third quarter of 2007.

The largest contribution to the surge came from the powerhouse services sector, which makes up around 75% of the total economy and grew at 1.3%, following a 0.1% drop in the previous quarter.

But the bounce-back was largely driven by one-off factors, the ONS warned, such as clawed-back activity lost to the extra bank holiday for the Queen's Diamond Jubilee and a slight lift from the Olympics.

The figures are preliminary estimates and subject to revision.

The estimate comes amid warnings from economists that the UK is far from out of the economic woods and can expect growth to slow in subsequent quarters.

But Chancellor George Osborne said the figures show that "we are on the right track".

Vicky Redwood, chief UK economist at Capital Economics, said removing the one-off factors, the figures still suggested underlying output managed to rise by a small amount, which is an improvement on recent quarters.

She said: "It won't be plain sailing from now on, though. There are still a number of constraints on the recovery. And as the Olympic effects unwind, it is still possible that the economy contracts again in the fourth quarter."

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