Newspaper article The Evening Standard (London, England)

'Depressed' Outlook for UK Economy despite Recovery

Newspaper article The Evening Standard (London, England)

'Depressed' Outlook for UK Economy despite Recovery

Article excerpt

Byline: Hugo Duncan

THE economy will remain "depressed" for some time, despite a strong recovery over the summer.

A leading think-tank today said gross domestic product grew by 0.9% in the three months to the end of July -- slower than the 1.1% expansion seen in April, May and June but still strong.

The National Institute of Economic and Social Research, which published the report, warned that growth will slow further over the coming months as tax rises and public spending cuts start to bite.

City forecasters reckon that the 1.1% growth seen in the second quarter of the year will be as good as it gets for the UK economy.

The NIESR said that while the "recession" is over, the "depression" will continue for some time because output is still well below what it was before boom turned to bust.

"We do not expect output to pass its peak in early 2008 until 2012," the think-tank said.

Separately, official figures showed that manufacturing output rose by 0.3% in June.

This meant production in British factories was 4.1% higher than in June 2009 -- the fastest pace of growth since February 2000.

"The manufacturing sector is continuing to show positive growth, benefiting from the upswing in global activity," said Peter Dixon, an economist at Commerzbank in London. …

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