UK economy grows by 0.5% in first quarter of 2011
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.
In order to reduce the government deficit, spending cuts of £81bn are being made and VAT has been raised to 20% from 17.5%.
A spokesman from the Treasury said: "It is good news that the economy has returned to growth. Manufacturing is growing strongly, the economy has created thousands of jobs since the turn of the year, and borrowing is down."
He added: "Today's data shows that the government has set the right economic course."
The low rate of growth is likely to lessen the chance of an early interest rate rise by the Bank of England to combat inflation, which is currently running at 4%, analysts say.
BBC News
Comments