Economic growth in the U.K. was unrevised for the first three months of the year, indicating that the recovery has stalled and output is unchanged from the autumn of last year, according to Financial Times. On Wednesday, the Office for National Statistics reported that gross domestic product in the U.K. expanded by an unrevised 0.5% in the first quarter of 2011, which was only enough to reverse the 0.5% contraction in the last thee months of 2010. The data showed that a 0.6% drop in household spending held back the recovery to take off 0.4% from economic growth and leaving the size of the economy at the same size seen in September of last year.
Meanwhile, the Organization for Economic Cooperation and Development cut its forecast for U.K. growth again, forecasting that the country’s economy would add 1.4% in 2011 and 1.8% the following year. The group cited government austerity measures and necessary fiscal policy tightening for the lowered growth forecast, but maintained its support of the government’s deficit-reduction plan. The forecast is below the Office for Budget Responsibility’s official expectations for a 1.7% expansion in 2011 and 2.5% growth in 2012. The OECD urged the Bank of England to start increasing interest rates soon despite the uncertain economic outlook.
Click here to read the story on UK GDP data from Financial Times.
Click here for coverage of the OECD’s outlook from Financial Times.