Triple-dip avoided as economy grows
The growth figure remains unchanged from the initial estimates the ONS gave in April.
Output from Britain’s service sector, which makes up more than three quarters of GDP, rose by 0.6% in the first quarter after stalling in the final quarter of 2012.
Consumer spending saw a small increase of 0.1% on the quarter but was continued to be one of the main contributors to overall GDP growth.
Industrial output was 0.2% higher whilst construction output failed to maintain its momentum from the final quarter of 2012 and contracted by 2.4%.
In its commentary accompanying the revised figures the ONS said GDP growth has been slowed by weakness in the domestic and global markets.
It also said that slower wage growth was affecting people’s ability to spend and dampening the prospects for growth.
On Wednesday the International Monetary Fund said Britain should spend more now to fund investment and speed up its recovery.
The Forum of Private Business said today’s second revised Q1 GDP figures are welcome confirmation that the UK economy is heading in the right direction.
Phil Orford, the Forum’s chief executive, said: “No one likes to use the term ‘green shoots of recovery’ any more, but it certainly seems to be that this is what we are seeing.
“There may still be stormy times ahead, particularly with the Europe situation, but this confirmed GDP figure certainly points to the UK economy coming into bud.
“Just how long before we see it in full bloom will depend on many external factors, but this will be pleasing for businesses as the figure has not been revised down as we’ve seen previously.
“Hopefully this will be the confidence boost SMEs have been waiting for, and will help kick start the UK economic engine which has so far been spluttering.
“What we need now is for those businesses who’ve been sitting on cash reserves while the economy was in the doldrums to go out and invest, driving job growth and creating wealth – something that’s been absent for an incredibly long time.
“We don’t expect there’ll be champagne corks popping in Downing Street just yet, but they might want to dust off a few bottles for later in the year if we see more sustained growth from Q2.
“Next week’s BDRC bank lending figures will also make interesting reading and could well give a clearer indication as to how business is faring.”