27 August 2010 #Employment
The UK economy grew by more than initially thought in the second quarter of 2010. The Office for National Statistics` (ONS) had estimated growth of 1.1% last month, with the actual figure slightly higher at 1.2%. This is the fastest rate of growth since quarter one of 2001.
The figure was helped by strong growth in the construction sector of 8.5%, the highest rate since 1982. The, business services and finance sector also performed well with 1.5% growth, service industries recorded 0.7% growth, while the manufacturing sector also grew by 1.6%. Despite these promising figures, one area that suffered a large reduction was air transportation, which fell 11%.
Aileen Simkins from the ONS said the overall effect in the quarter had been "very positive" and that the fall in the air transport sector reflected the effect in April of the Icelandic Volcano as well as the strikes by British Airways.
Economists welcomed the figures but warned there were signs the recovery is already beginning to decelerate.
A Treasury spokesman admitted that "While the Government is cautiously optimistic about the path for the economy, the job is not yet done."
Graeme Leach, chief economist at the Institute of Directors warned that "Instead of looking in the rear view mirror at what has passed, it would be wiser for us to keep our eyes on the road ahead. We don`t expect this level of growth to be sustained through the second half of 2010... But whether or not this slide will turn into a quarterly decline or a double-dip recession remains highly uncertain."