NIESR warns UK output won't reach 2008 levels until 2014

Wednesday, 13 June 2012 10:25

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The National Institute of Economic and Social Research (NIESR) has issued its latest monthly GDP estimate and it predicts that the UK economy grew by 0.1 per cent in the three months to May.

The figures contradict official data from the Office for National Statistics (ONS) which said that the economy contracted by 0.3 per cent in the first three months of 2012. This followed a fall in the final quarter of 2011, meaning the UK slipped into a double-dip recession.

NIESR said: “The UK economy has ceased to contract, but economic activity remains very weak. With the economy stagnant, the negative output gap is likely to widen further.

"We expect the UK economy to remain broadly ‘flat’ over the next six months. While significant downside risks persist, we expect economic recovery to begin to take hold in 2013.

“Thus , unless output turns down again, the recession is over , while the period of depression is likely to continue for some time. We do not expect output to pass its peak in early 2008 until 2014.”

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