UK economy shrank towards the end of 2012

UK economy shrank towards the end of 2012

• The UK economy contracted by 0.3% in the last three months of 2012, according to the National Institute of Economic and Social Research (NIESR).
• The NIESR blamed it on artificially strong growth in the third quarter.
• If the figure is confirmed by official data later this month, it will mean that the economy returned to growth for only a single quarter.
• It would also mean the economy saw zero growth for the whole of 2012.
• All tickets for the Olympics and Paralympics were considered in the official statistics to have been bought in the third quarter of 2012, when the games took place.
• That flattered the economy, which registered growth of 0.9% in the three-month period.
• The index of production grew 0.3% in November, compared with October, but had been expected to grow more as some North Sea oil and gas production resumed following maintenance.
• Construction sector output contracted 3.4% in the month.
• But both sectors are much smaller than the service sector, which posted 0.1% growth in October compared with September.
• Official figures for the service sector for November have not yet been released, but the widely-watched Markit/CIPS purchasing managers' index showed the sector growing at its slowest pace for two years in the month.