PwC: Modest GDP growth shows UK economy limping rather than sprinting out of recession
Preliminary GDP estimates showed only minimal growth of 0.2% in Q1 2010 compared to market expectations of 0.4% growth, although these provisional estimates could be revised up later as happened in the fourth quarter of 2009.

Fuente:    Fecha:  27.04.2010

PwC: Modest GDP growth shows UK economy limping rather than sprinting out of recession

The Q1 estimates showed relatively strong 0.7% growth in manufacturing output and solid 0.6% growth in the transport and communications and business services and finance sectors. But the distribution sector was hit by the VAT rise and the snow in January, while the construction sector remains in recession according to these preliminary estimates.

John Hawksworth, head of macroeconomics at PricewaterhouseCoopers, commented that: “GDP growth of only 0.2% in Q1 2010 indicates that the UK economy was limping rather than sprinting out of recession in the early part of this year, held back by the snow and the VAT rise in January. Although the UK economy is technically out of the recession, GDP in Q1 2010 remained around 5.6% lower than its pre-recession peak in Q1 2008 so the recovery will still feel fragile to many businesses.

Retailing and construction were particularly weak in the first quarter, although there have been some more encouraging signs recently of a revival in manufacturing exports, helped by the global recovery and the weak pound. The telecommunications, business services and finance sectors also recorded steady growth in the first quarter.

These preliminary figures could well be revised up in due course, but we still expect GDP growth to remain modest at only around 1% in 2010 and our projections suggest that the level of GDP may not recover to pre-recession levels until Q2 2012. It will be a long hard climb out of recession and there are many potential dangers to be negotiated along the way. These risks include a possible further rise in unemployment over the next few months and the drag on medium-term economic growth from expected significant public spending cuts and tax rises from 2011 onwards. We are not out of the woods yet by any means.”