UK exits double dip recession as GDP rises 1%

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The UK has exited the double dip recession after reporting growth of 1 per cent during the third quarter of 2012.

The output of the production industries was estimated to have increased by 1.1 per cent in the third quarter, following a decrease of 0.7 per cent between the first and second quarters of the year.

Output for the service industries was estimated to have increased by 1.3 per cent in third quarter and followed a decrease of 0.1 per cent between the first and second quarters.

However, construction sector output was estimated to have decreased by 2.5 per cent in the third quarter. It had shrunk by 3 per cent between the first and second quarter.

Royal London Asset Management economist Ian Kernohan says: “As expected, GDP growth moved back into positive territory in the third quarter, although the number was much stronger than expected.

“No doubt this bounce will passed off mainly as an Olympic boost, though a much larger influence is the volatility caused by the Diamond Jubilee holiday in June.”

He adds: “Unless we have an unusual weather event, there should be no special factors in the fourth quarter, so we will get a better idea of the underlying growth picture when the next set of GDP data is published in January.”

The economy first went into recession during 2008 before coming out again in 2009.