New forecasts released today by the National Institute of Economic and Social Research (NIESR) have estimated that the UK economy has shown growth of 0.1% in Q1 of 2012.
If Office of National Statistic (ONS) figures, released on 25th April, confirm the economy has grown, the UK will avoid dipping back into recession, following a 0.3% drop in activity was recorded for the last quarter of 2011.
This prediction follows the Bank of England’s Monetary Policy Committee confirmation on Thursday that its quantitative easing (QE) policy will remain unchanged and interest rates are to be held. But economists widely believe more QE will follow in May after the latest rounds of bonds purchases are complete.
Growth in the UK economy was said to have been driven by both public sector and private sector services output.
Panic buying of petrol at the end of March were not factored into the economic prediction, but senior research fellow at NIESR, Simon Kirby, admitted it was likely to have a limited effect on overall GDP figures.
Looking ahead to the coming months, Mr Kirby said, “The eurozone crisis has not gone away but if it continued (to ease) that would have a positive implication for the UK. Business confidence and investment might start to pick up."