Britons Have Greater Than Usual Interest on First Quarter Growth Data
Britons have greater than usual interest on the release of first-quarter growth data, wondering whether the figures will show the country is back in recession or not, a state that could hammer business and consumer morale with its success and failure. On this, Philip Shaw, Investec economist said that a negative figure would carry political ramifications, but there'd be almost nothing the government could do about it. The budget has been and gone, and at this stage they don't have any scope for fiscal adjustment. Mr. Shaw says that a negative figure would carry political ramifications, but there'd be almost nothing the government could do about it.
Moreover, an apparent slump in construction at the turn of the year means Britain's services sector will have to report solid growth if the economy is to avoid the two straight quarters of contraction that signal recession. Most economists believe that Britain will have scraped through with growth of 0.1 percent or slightly more in the first three months of this year, but a sizeable minority sees a slight contraction.
In the final three months of 2011, Britain's economy shrank by 0.3 percent. However, most private-sector surveys since then such as those from purchasing managers and that from the British Chambers of Commerce have pointed to moderate growth. In addition, official data has shown that the unemployment rate fell for the first time in nine months in February, and first-quarter retail sales volumes rose by 0.8 percent. Moreover, industrial output for the three months to February fell 0.5 percent. Construction output slumped more than 15 percent in the same period, albeit on a non-seasonally adjusted basis. In fact, even when seasonal adjustment, a likely rebound in March and construction's small share of GDP are taken into account, economists reckon the sector is likely to knock 0.5 percent of GDP, placing a heavy onus on other areas to create growth. Apply for text loans and get quick cash for your urgent needs.
But, none of these figures contribute directly to the Office for National Statistics's (ONS) estimate of first-quarter GDP and the figures that do have generally been disheartening. On the remarks of ONS, the Bank of England has said that it believes the economy is healthier than the ONS data is likely to suggest, and is unwilling to sanction more monetary stimulus. But it acknowledges a risk that the public might not see it that way, potentially causing a vicious circle of falling demand.
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