UPDATE 1-UK economy to take 2013 oil hit before N.Sea recovery

Mon Feb 25, 2013 11:45am EST
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* Oil & gas production to fall 3-6 pct in 2013 -Oil & Gas UK

* Industry body survey says output down 14 pct in 2012

* Production seen rising in the period 2014 to 2017

* Sluggish growth cited by Moody's in downgrade

By Sarah Young

LONDON, Feb 25 (Reuters) - Britain's stagnating economy will take another hit from waning UK North Sea oil production this year before a mini-recovery takes hold in 2014, removing a handbrake on medium-term growth in the world's no. 6 economy.

Declining North Sea oil production has undermined the British government's attempts to kickstart growth and helped push the $2.5 trillion economy to the brink of a "triple-dip" recession.

But after three years of gloom, from 2014 onwards oil production could become a bright spot for the economy: industry body Oil & Gas UK forecast a historic pick-up in output, fuelled by a surge in investment.

"The wave of investment is coming to deliver a lot of new production in the years ahead," Oil & Gas UK's economics and commercial director Michael Tholen told Reuters.   Continued...