Prospects for the UK Economy

The persistent weakness of UK economic growth figures has dominated recent economic commentary. This debate continued with the release of the Office for National Statistics‘ (ONS) preliminary estimate of GDP growth for the second quarter of this year. The ONS estimates that the economy enjoyed only a modest expansion in the second quarter: 0.2 per cent per quarter. This implies the level of output is little changed from the third quarter of 2010. ‘One-off effects’ are partly responsible for the weak growth in the second quarter. We expect GDP growth to accelerate in the third quarter of this year (see figure 1), but this increase is likely to be flattered by the events of the second quarter.