The National Institute for Economic & Social Research (Niesr) has reported that the UK has exited recession after ceasing to contract.
Its monthly estimates of GDP suggests that the UK grew by 0.1% during in the three months to the end of May, after shrinking by 0.1% in the three months to end of April.
The latest estimates reveal economic activity remains very weak, with a negative output gap likely to widen further as the economy remains “stagnant”.
It adds: “We expect the UK economy to remain broadly ’flat’ over the next six months. While significant downside risks persist, we expect economic recovery to begin to take hold in 2013.” (article continues below)
Niesr says though the recession period – where output is falling or receding – is over, the UK remains in a depression, with output depressed below previous peaks. Output is not expected to pass its 2008 peak until 2014.
According to Niesr, its projection for the most recent three-month period has a standard error of 0.1-0.2%, compared with the first estimate by the Office for National Statistics.