UK economic recovery 'feeble and fragile'

Britain is facing a "feeble and fragile" recovery, experts warned today ahead of figures expected to confirm the economy has exited the longest double-dip recession since the 1950s.

Gross domestic product (GDP) - a broad measure for the total economy - is predicted by City experts to have grown 0.6% between July and September, ending three consecutive quarters of declining output.

But the bounce-back in the third quarter will be largely driven by one-off factors, such as clawed-back activity lost to the extra bank holiday for the Queen's Diamond Jubilee and a slight lift from the Olympics.

Economic indicators, such as purchasing manager surveys, suggest the manufacturing and construction sectors remained weak throughout the period, although the powerhouse services sector should deliver a robust performance.

Howard Archer, chief UK and European economist at IHS Global Insight, warned any recovery was "currently looking feeble and fragile".

"Looking through the distortions to GDP in the second and third quarter, the likelihood is that the economy is eking out limited growth," he added.

The figure, published by the Office for National Statistics (ONS), is a preliminary estimate based on the output side of the economy and is subject to revisions.

The economy shrank by 0.4% in the second quarter, according to the ONS, which was revised up gradually from an initial estimate of a 0.7% decline.

The economy has been battling against sluggish consumer spending, Government spending cuts and high unemployment, while the struggling eurozone has hit exports.

While underlying growth is considered to be weak, analysts said the recovery has been helped by lower inflation, recent gains in employment and an edging up of earnings growth.

The economy is also expected to continue growing in the fourth quarter from October to December but at a much slower rate, with predictions coming in around the 0.3% mark.

The Bank of England is expected to pump further emergency support into the economy next month through its quantitative easing programme, which hit £375bn (€461.6bn) in July.

The Bank and the Treasury also launched the £80bn (€98.5bn) Funding for Lending scheme in a bid to unclog the flow of credit to Britain's households and businesses.

Mr Archer added: "The UK still has a very tough job in developing significant sustainable growth given tighter fiscal policy, ongoing serious problems in the eurozone and generally soft global growth.

"In addition, there are still significant pressures facing consumers that are likely to limit the upside for their spending for some time to come."