The U.K. economy rebounded from the contraction in the fourth quarter of 2010 by posting growth of the same amount in the first three months of the year, which suggests six months of stagnation, according to Financial Times. On Wednesday, the Office for National Statistics reported that the U.K. economy grew by 0.5% in the first quarter of 2011, which was in line with analysts’ expectation for growth. However, the data reflect a rebound from the 0.5% contraction during the previous quarter that means gross domestic product is unchanged from the third quarter of last year.
The data suggests that there is a very weak underlying trend for the economy, and harsh winter weather at the end of 2010 was expected by some experts to lead to a stronger resurgence in the first quarter due to pent-up demand. According to The Daily Telegraph, Rob Carnell of ING was still reasonably upbeat about the report since, “Not all of the growth in the first quarter will have been a bounce-back,” extrapolating, “So there does appear to be some underlying growth here.” However, Vicky Redwood of Capital Economics said the “catch-up” effects of pent-up demand could have belied a negative underlying trend.”
Click here to read the story on U.K. growth from Financial Times.
Click here for coverage of economists’ reactions from The Daily Telegraph.