Millennium Post

Olympics pull UK out of worst post-war recession

Britain powered out of its longest double-dip recession since the 1950s after its economy returned to growth in the third quarter with a robust gain of 1.0 per cent, official data showed on Thursday.British gross domestic product (GDP) grew at the strongest rate for five years during the July-September period thanks to one-off factors such as the London Olympics – and after output contracted in the previous three quarters.

Market expectations had been for the economy of Britain, which is not part of the eurozone, to have expanded by 0.6 per cent in the third quarter compared with the second after falling into a double-dip recession in late 2011.

British Prime Minister David Cameron welcomed the data that gave a boost to the London stock market and sterling, but warned against complacency amid global economic headwinds.

'There is still much to do, but these GDP figures show we are on the right track, and our economy is healing,' Cameron said in a statement.

Finance minister George Osborne echoed the cautious sentiment, saying that recent 'weak data from the eurozone were a reminder that we still face many economic challenges at home and abroad.' Britain escaped from a deep downturn in late 2009 but fell back into recession at the end of 2011.

GDP, or the combined value of produced goods and services, contracted by 0.4 per cent in the second quarter of this year after shrinking by 0.3 per cent in the first – and by 0.4 percent in the final quarter of 2011.

'GDP was estimated to have increased by 1.0 percent in Q3 2012 compared with Q2 2012,' the Office for National Statistics said in a statement.

'The largest contribution came from the services sector. There was also an increase in activity in the production sector.'
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