UK economy grew quicker than previously estimated

iStock_recession_recoveryThe UK’s economy expanded by 0.3 per cent during the final quarter of 2009.

The Office for National Statistics (ONS) had made an initial estimation of growth of 0.1 per cent.

The new, upwardly revised figure suggests that the UK economy emerged from the recession at a faster rate than had been previously thought.

The increase in GDP was the first in six consecutive months as the UK exited the deepest economic downturn in decades.

The expansion was driven by a boost in output in the service sector of 0.5 per cent (revised up from 0.1 per cent), while production industry output grew by 0.4 per cent, compared with a fall of 1 per cent in the previous quarter.

Household spending also registered an improvement, rising by 0.4 per cent.

The Treasury was cautious in its reading of the figures.

A spokesman said: “While it is welcome to see an upward revision, recent data in the European Union and elsewhere has indicated that there are risks and uncertainties to this recovery, and there is no room for complacency.

“Withdrawing support that has helped us get to this point would put the recovery at risk.”

Some analysts, however, are still concerned that the economy remains in danger of sliding back into negative growth.

The rise in VAT to 17.5 per cent and the decision of the Bank of England to half its quantitative easing programme could still dampen the rate of recovery.

Ian McCafferty, the CBI’s chief economic adviser, said: “The numbers for the first quarter of this year could still turn out to be quite weak.”

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