UK economy grew at o.5% in third quarter 2010

Economic growth in Britain is likely to have slowed to 0.5 percent in the third quarter of this year from 0.6 percent in the three months to August, a leading think tank said on Thursday. Skip related content

The release from the National Institute of Economic and Social Research will reinforce expectations that official third-quarter gross domestic product data on Oct 26 will show growth has more than halved from the robust 1.2 percent rate recorded in the second quarter.

“A growth rate of 0.5 percent is below our estimate of the economy’s underlying trend rate, and has come at a time when the economy is still below capacity,” the think tank said.

“Thirty months have passed since the onset of recession, yet the economy still remains more than 4 percent below its pre-recession peak.”

The Bank of England left interest rates unchanged at 0.5 percent on Thursday and is not expected to raise them until the second half of 2011 at the earliest.

Indeed, concerns about the health of the global recovery and the impact of government spending cuts have led a growing minority of economists to predict the Bank will restart the quantitative easing programme that it paused in February.
Source: Reuters