The UK officially came out of the recession in Q4 2009 as GDP rose to plus 0.4 per cent. These first figures indicate UK output has dropped slightly but has avoided a ‘double dip’ back into negative territory.
The ONS says UK GDP growth can be attributed to an increase in business service, finance and manufacturing.
GDP decreased 0.3 per cent in 2010 Q1, compared with 2009 Q1’s 0.5 per cent growth.
Schroders European economist Azad Zangana says these latest growth estimate will come as a blow for Gordon Brown’s re-election campaign and notes that poor US GDP figures had a major negative impact on President George Bush senior’s campaign against Bill Clinton in 1992.
He says: “The City had expected growth of 0.4 per cent for the first quarter, though we were looking for weaker growth due to the poor weather in January, and higher than expected inflation, which appears to be depressing growth in real terms.
“Despite the disappointing number, we expect growth to remain sluggish, but pick up throughout the year.”