By Nick Mann | 12 January 2012
The UK economy grew by just 1% last year, less than half the rate in 2010, according to figures published today by the National Institute of Economic and Social Research.
In its latest monthly estimate of gross domestic product, the think-tank said output grew by 0.1% in the three months ending in December, a decline from the 0.3% it reported last month for the three months ending November.
This is the third consecutive decline in growth, following a gradual increase in summer to a peak of 0.6% for the three months ending in September. This means total growth last year was 1%, compared with 2.1% for 2010, the NIESR said.
The think-tank said its figures showed that the UK economy was in depression – defining it when output remains stuck below its previous peak – and was likely to continue to be in that position ‘for some time’. In December, the think-tank said it did not expect output to pass its early 2008 peak until 2013.
Manufacturing output also fell for the third consecutive month, down 1.3% for the three months ending December. This followed declines of 0.9 % for the three months ending November and a 0.3% a month earlier.
On a quarterly basis, the think-tank estimates that industrial output fell by 5% in the fourth quarter of 2011 compared with the previous three months. The construction sector also shrank.
However, there were rises in agriculture – up by 1.2% on the previous quarter – and private services – up by 2.5%, while public services recorded a 0.1% quarter-on-quarter growth.
The NIESR figures were accompanied today by data published by the Office for National Statistics showing UK industrial output in November 2011 was 0.6% less than in November 2010.
However, today also saw the Bank of England again hold interest rates at 0.5%. The bank has now held the rate at its record low since March 2009.
The most recent official growth figures, published by the ONS just before Christmas, mirrored those published by the NIESR for the third quarter of 2011, showing a 0.6 increase in GDP.
