Henderson chief economist Simon Ward explains why the latest UK GDP figures are misleading, arguing the economy is on track for a moderate recovery.
UK GDP is provisionally estimated to have risen by 0.2% last quarter and by only 0.7% over the last year. These figures understate the economy’s underlying progress because of a big fall in North Sea production and special factors that depressed the second-quarter outturn. These included the royal wedding bank holiday, disruption due to the Japanese earthquake / tsunami and Olympic ticket sales that will not be recorded in the national accounts until the third quarter of 2012. Without these effects, GDP would have risen by 0.8% last quarter and by 1.6% over the last year. (These numbers ...
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