Will Olympics bring UK economy out of double-dip recession?

Figures from the Office of National Statistics (ONS) due out soon are likely to have shown the UK economy has grown following nine months of contraction, so officially hauling the country out of recession.

The Gross domestic product (GDP) figures will take into account the impact of the Olympics for the third quarter of the year, with impressive ticket sales and television rights included in the figures. Initial expectations are for growth of approximately 0.7%, thus seeing the UK shake off its recessionary status for the first time in 2012.

Prime Minister David Cameron also hinted at a high level of economic growth for the third quarter by saying there was "more good news to come" in Prime Minister's Questions (PMQs) on Wednesday morning. A large chunk of the growth will be due to a bounce back in services output. Purchasing Managers’ Index (PMI) figures for the sector, which accounts for more than 70% of the UK’s economy, increased to 53.7 in August, up from 51 in July. A number above 50 indicates growth. Although the figures will please the government about the state of the UK economy, there will still be the possibility of contraction for the fourth quarter of 2012 as the economy loses the impact of the Olympics.