Olympics helps Britain leap out of recession

Thu Oct 25, 2012 5:11am EDT
 
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By Peter Griffiths and Olesya Dmitracova

LONDON (Reuters) - Britain rebounded strongly from recession in the third quarter, posting its strongest quarterly GDP growth in five years, boosted at least in part by robust Olympics spending, official data showed on Thursday.

The jump in growth was subject to a number of temporary factors, including the Olympics, which may mask a weaker underlying picture.

But it was still much better than expected and may mean Britain's full 2012 economy will not be in the red.

The Office for National Statistics said Britain's gross domestic product rose by 1.0 percent between July and September, beating forecasts for a 0.6 percent gain, after shrinking by 0.4 percent between April and June.

On the year, the economy was flat, also better than expected.

The return to growth after three consecutive quarters of contraction was welcome news for a coalition government under pressure to do more to revive the economy.

However, the third quarter rise was boosted by ticket sales for the London Olympics - which the statistics office estimated accounted for a fifth of the quarterly increase - and a rebound from an extra public holiday in the second quarter.

Stripping out those one-off effects, economists said growth in the UK economy was weak and that headwinds from the euro zone were likely to act as a drag in the coming months.   Continued...

 
Commuters walk towards the financial district via London Bridge. REUTERS/ Ki Price