UK GDP expands 0.3 per cent, economy continues to flatline

UK GDP grew by 0.3 per cent in the first three months of 2013, according to the latest quarterly national accounts from the Office for National Statistics (ONS).

UK GDP grew by 0.3 per cent in the first three months of 2013, according to the latest quarterly national accounts from the Office for National Statistics (ONS). This means that the economy is back where it was six months ago, and UK economic output still 2.6 per cent below Q1 2008.

The key points from the latest release from the ONS are:

  • GDP increased by 0.3% in Q1 2013 compared with Q4 2012. GDP was 0.4% higher in Q1 2013 than in Q3 2011 and therefore has been broadly flat over the last 18 months.

  • By far the largest contribution to Q1 2013 GDP growth came from services; these industries increased by 0.6% contributing 0.47 percentage points (pp) to the 0.3% increase in GDP.

  • There was also a small upward contribution (0.03pp) from production; these industries rose by 0.2%, largely due to mining & quarrying, which increased by 3.2% following a weak Q4 2012 when extended maintenance in the North Sea reduced output.

  • These upward contributions were partially offset by construction; these industries fell by 2.5%, reducing GDP growth by 0.17pp.

  • Before the sharp fall in output in 2008 and 2009 the economy peaked in Q1 2008; the lowest level was in Q2 2009. GDP fell 6.3% peak to trough. In Q1 2013 it was estimated that GDP was 2.6% below the peak in Q1 2008.

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