Commenting on the Office for National Statistics’ preliminary estimate of UK Gross Domestic Product which showed that the economy grew by 0.3% in the first quarter of 2013, KPMG Chief Economist, Andrew Smith, said:
“Phew! At least we have escaped the dreaded triple-dip recession – and by a larger margin than expected. The recovery has to start somewhere and the 0.3% rise in output in the first quarter is ahead of the Office for Budget Responsibility’s expectations, adding credibility to its forecast of 0.6% growth for the year as a whole.
“But the celebrations will be muted. Households are struggling against a backdrop of high debt and falling real wages while our main export market – Europe- continues to stagnate. And the labour market – which has been resilient so far – is starting to show signs of weakness. The big picture remains one of a broadly flat economy with output still some 2½% below its pre-recession peak.
“By any standards this is at best a weak recovery as the private sector struggles to generate sustainable growth on its own. After a fiscally conservative budget, the Chancellor is putting a lot of weight on monetary activism. Over to you, Mr Carney.”
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