The UK economy has returned to growth in the three months from July to September, boosted by the Olympic Games, it has been announced today.
GDP grew by one per cent over the third quarter compared with Q2, according to the Office for National Statistics (ONS) although, in volume terms, it remained flat when compared with the same period a year earlier.
All Olympic and Paralympic ticket sales have been allocated to the third quarter, boosting GDP by 0.2 per cent and the ONS noted that the events impacted the economy in a number of ways, primarily through creative arts and entertainment and higher employment, though putting an exact figure on its impact has proved difficult.
However, the ONS stated: “Retail showed some strength in the quarter but there was very little evidence of any significant Olympic effect.
“Indeed there was some feedback from online retailers that sales were lower as consumers watched the Olympics instead of shopping online.”
Comparisons with the previous quarter have proved beneficial thanks to Bank Holidays during the Queen‘s Diamond Jubilee, meaning that Q3 had one more working day, impacting growth between the second and third quarters.
Vicky Redwood, Chief UK Economist at Capital Economics, explained that the one per cent rise was “a fair bit better” than predicted though warned that temporary factors may cloud the economic picture long-term.
Redwood commented: “The big picture is that the economy is still taking a very long time to get back on its feet.
“GDP in Q3 was no higher than a year ago and is still just over 3 per cent below its pre-recession peak.
“And as the Olympic effects unwind, it is still possible that the economy contracts again in Q4.
“This would leave GDP in 2012 as a whole shrinking, albeit by slightly less than the 0.5 per cent drop that we have been forecasting.”