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UK ECONOMIC GROWTH ‘TO BE REVISED UP’

By NBF News
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The weak pound has helped UK exporters
The UK economy grew by 0.5% between February and April, the National Institute of Social and Economic Research (Niesr) has said.

That is up from the 0.2% growth both it and the Office for National Statistics (ONS) estimated for the first three months of the year.

The leading think tank said it now expected the ONS to upgrade its first-quarter official growth estimate.

It added that the weak pound had also started helping the economy.

“The competitive situation in which the UK economy finds itself following the exchange rate adjustments of the last two years is beginning to have a favourable effect on output,” said Niesr's director Martin Weale.

A weaker pound typically helps UK exporters, as their products become cheaper for foreign buyers.

But Mr Weale added that a weak recovery was still on the cards.

“A further acceleration of growth is needed if progress is to be made in closing the output gap which has opened up since the start of the depression in March 2008,” he said.

A rise in industrial output is also expected to have boosted GDP.

Earlier the ONS reported 2% rise in industrial output for March – much stronger than anticipated by many analysts.

The official statistics body said it now expected to revise its estimate for first-quarter growth up to 0.3%, all else being equal.