Britain’s economy probably expanded in the first quarter of the year and avoided a triple-dip recession, according to an estimate from the National Institute of Economic and Social Research.
Gross domestic product rose 0.1 percent in the period, the same pace as in the three months through February, the London- based institute, whose clients include the Bank of England and the U.K. Treasury, said in a statement today. The economy shrank 0.3 percent in the fourth quarter of 2012.
The estimate follows data showing that industrial production rose 1 percent in February, more than twice as much as economists had forecast, rebounding from a slump in January when snow hampered activity. Niesr’s estimate matches that of Markit Economics, which said last week that its industry surveys indicate first-quarter expansion of 0.1 percent.
“Production sector output picked up sharply in February 2013, but this was largely a reversal the sharp drop in output in January,” Niesr said in the statement. “Our estimates suggest that both production sector output and the broader economy were broadly flat in the first quarter.”
Niesr also said Britain is in a “depression,” which it defines as a period when output is depressed below its previous peak. It forecasts the economy will expand 0.7 percent this year and 1.5 percent in 2014, and it doesn’t expect output to pass the peak in early 2008 until 2015.
The institute said its calendar-quarter GDP projections have a standard error of 0.1-0.2 percentage point when compared with the first estimate produced by the Office for National Statistics. The ONS is due to publish the data on April 25.
The gain in industrial output in February compared with economists’ forecast for a 0.4 percent increase, based on the median of 30 estimates. It was led by a 2.8 percent gain in mining and quarrying. Gas and electricity increased 1.3 percent, boosted by demand during cold weather.
Factory production rose 0.8 percent in February from the previous month, also exceeding economists’ forecasts. Out of 13 categories in manufacturing, eight rose in February from the previous month, four declined and one was unchanged.
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