The UK economy grew by 0.9% in the third quarter, according to figures released today by the Office of National Statistics (ONS).
However, some leading UK economic think tanks have warned that the British economy may have entered a triple dip recession. Some organisations warn that the economy may have contracted in the fourth quarter. This is despite positive signs in the housing market with property transactions beating initial expectations. This stimulated growth may in part be because of the Funding for Lending Scheme (FLS).
Capital Economics Chief UK economist Vicky Redwood says the future may not be as positive as first expected. She observed that while GDP had risen in the third quarter, there is evidence to “suggest that the economy may have contracted in the fourth quarter”, thus putting the country into a triple dip recession. She believes the economy may have shrunk by 0.1% or 0.2% throughout 2012, and thinks 2013 may only see 0.2% growth rather than 0.5% as previously predicted.
Moreover, the Centre for Economics and Business Research (CEBR) also expects less than 1% growth in 2013. They felt the Olympics and Queen’s Jubilee had “propped up” the second and third quarters. If Britain has in fact entered a triple dip recession, this could have an impact on mortgage interest rates despite the relative success of the FLS.
