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UK economy 'remains flat'

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UK economy remained subdued towards this month

Economic growth in the UK remained subdued towards the end of last year, new figures have revealed.

According to the National Institute of Economic and Social Research (NIESR), gross domestic product (GDP) had gone up by 0.1 per cent during the three months to November 30th 2012.

However, a 0.3 per cent drop was recorded throughout the three months to December 31st.

NIESR acknowledged that the figures for the end of 2012 had been distorted by the figures for the previous quarter, during which time the UK hosted the Olympic Games.

Nevertheless, it believes that if these one-off factors are taken out of the equation, it is apparent that growth has been flat throughout the year as a whole.

"These estimates suggest a growth rate of 0.0 per cent in 2012, down from 0.9 per cent in 2011," NIESR commented.

The organisation is confident that official data from the Office for National Statistics regarding the economy's performance last year will be close to its own calculations.

Indeed, NIESR said it has a good track record of producing reasonably accurate early GDP estimates, with an error margin of just 0.1 to 0.2 per cent.

The forecasts are slightly more optimistic than those of the British Chambers of Commerce (BCC), even though it raised its growth forecast for 2012 last month.

While the business group had been expecting GDP to slump by 0.4 per cent last year, it now expects a contraction of 0.1 per cent.

However, the BCC is less confident regarding the economy's performance in 2013. Whereas it originally anticipated growth of 1.2 per cent this year, it has now downgraded this to one per cent.

Similarly, its growth predictions for 2014 have been cut from 2.2 per cent to 1.8 per cent.

The BCC believes the economy will continue to struggle in the face of a deteriorating international environment, with the eurozone debt crisis proving to be a particular problem at the moment.

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