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Analysts expect the UK government to announce the country’s economy contracted by 0.3% in the fourth quarter of 2012.
Research by the National Institute of Economic Research and Social Research (NIESR) indicates that the 1.0% growth seen in the third was artificial leading to contraction at the end of 2012. The figures raise further concern that the UK economy is heading towards a triple-dip recession.
If these figures are officially confirmed by the Office for National Statistics, who are due to report on the 25th January, it is likely that the UK would have seen 0.0% growth throughout the year.
In a statement the NIESR argue that he London Olympics and Paralympics led to a one-off 0.2% boost to the UK economy in the third quarter, with higher than normal consumer spending accounting for the growth rather than a sustainable rise in the construction or service sectors.
Once one-off Olympic related spending is removed from the third quarter figures the NIESR argue that the economy would be close to 0.0% growth in the second half of 2012, compared to the 0.9% recorded during the same period in 2011.
NIESR’s figures indicated that construction declined by 3.4% during November at the same time that North Sea oil and gas production rose by 0.1%, whilst the larger service sector grew by 0.1% in December.
