PM applauds leap out of recession
But experts warn UK economy continues to grow at very slow rate
Published 26/10/2012 | 08:00
David Cameron and George Osborne have been handed an economic boost after figures showed the UK had bounced strongly out of recession over the summer.
The best set of economic figures since Mr Cameron became Prime Minister showed the nation's output jumped by 1% in the three months to the end of September - far faster than City economists had forecast.
They also showed the best quarterly growth since the Northern Rock disaster in 2007.
The PM - who has hinted earlier in the week of "good news" to come - said economy was on "the right track". He welcomed the robust return of recovery but played down hopes that the UK's long slump was at an end.
Economists warned that if "one-off" factors such as the Olympics and the Jubilee were stripped out, underlying growth in GDP - the official measure of the size of the economy - was still slow.
Chief economist at foreign exchange company World First, Jeremy Cook, said: "While this is undoubtedly a welcome surprise, upon breaking down the numbers we should not get caught up in a flurry of champagne corks. Overall underlying true growth is only 0.3% at the moment - very much in the 'bouncing along the bottom' region."
The Office for National Statistics said ticket sales and other Olympic related activity contributed to third quarter GDP.
The extra Diamond Jubilee bank holiday in June, which meant the loss of a day's production in the previous quarter, also flattered yesterday's figure.
The ONS said "the underlying pattern is subdued economic expansion" and said GDP is no bigger than it was a year ago after nine months of "double dip" recession. Speaking during a trip to a business in Wandsworth in south west London, Mr Cameron said: "There's still a long way to go but these figures show we are on the right track with the right approach."
Manufacturing and other productive sectors grew by 1.1% but construction output slumped again by 2.5% - although this was smaller than in the two previous quarters.
The recovery was in the main driven by a 1.3% surge in the dominant service sector.
Yesterday's announcement completes a week of far more encouraging data with unemployment, inflation and the deficit all falling and retail sales rising.
Chancellor George Osborne said: "By continuing to take the tough decisions needed to deal with our debts, this Government is laying the foundations for lasting prosperity."
But Shadow Chancellor Ed Balls said: "With living standards falling, more tax rises on the way and the eurozone still in crisis, it would be very unwise of David Cameron and George Osborne to just sit back and hope for the best.
"The complacent thing to do now is simply to wait and hope things will get better. The cautious thing to do is to act now to secure growth in our economy."