The UK economy has recovered ground lost in the last quarter of 2010 but construction remains a worry The UK economy grew by 0.5% in the first three months of the year.
The Office for National Statistics’ (ONS) first estimate of economic activity shows a recovery from the 0.5% contraction recorded for the last three months of 2010.
The news alleviates fears of a so-called double dip recession.
However, the Chancellor, George Osborne, who saw the figures on Tuesday, has already warned “we are not out of the woods yet”.
Although activity in both the manufacturing and service sectors increased during the first three months of the year, construction – one of the worst hit areas in the last quarter of 2010 – was down by 4.7%.
Economists had previously warned that growth of less than 1% in the first quarter would be disappointing and raise concerns over the economy’s ability to withstand the coalition government’s austerity measures.
However, the low rate of growth is likely to ease the chance of an interest rate rise to combat inflation.
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