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UK recovery stronger than thought between 2011 and 2013: ONS
[LONDON] Britain's economy recovered more strongly than previously thought between 2011 and 2013, a time when fears were rife that government austerity plans were pushing the country back into recession, according to revised official figures.
Releasing an annual review of British growth data, the Office for National Statistics said Britain's economy regained its pre-crisis size in the second quarter of 2013, three months earlier than its previous estimate.
This came despite a slightly steeper recession in 2008 and 2009, and notably slower growth in 2010, when output rose 1.5 per cent compared with an earlier 1.9 per cent estimate.
By contrast, better coverage of small businesses and improved methods of measuring the economy enabled the ONS to revise up growth by 0.4 percentage points for 2011 and by 0.5 percentage points for 2012 and 2013.
For much of the period between 2011 and 2013, the opposition Labour Party blamed the austerity programme of Prime Minister David Cameron for pushing the country back into recession.
But a series of data revisions over the years have shown that growth during that period was stronger than the ONS had initially reported, though extremely weak by the standards of past economic recoveries.
Gross domestic product is now believed to have risen by 2.0 per cent in 2011, 1.2 per cent in 2012 and by 2.2 per cent in 2013, the ONS said. "These revisions notwithstanding, the current recovery remains the weakest in the past half-century. In particular, (the changes) do not significantly alter the scale of the productivity puzzle," the ONS said.
A report from Britain's National Institute of Economic and Social Research on Wednesday showed it expects the economy to grow 2.5 per cent in 2015, in line with a Reuters poll of economists, after 3.0 per cent growth in 2014.
The Bank of England has previously said ONS data understated the strength of Britain's recovery, and is due to publish a new set of growth and inflation forecasts on Thursday.
Citi economist Michael Saunders said Wednesday's ONS revisions were bigger than the central bank had pencilled in, and were likely to lead to tighter monetary conditions, even if they did not push the BoE to raise interest rates this year. "Evidence that the economy has been growing at a solid pace for some time reinforces our view that, over time, monetary conditions are likely to tighten more than markets expect, via some mix of a higher policy rate and/or higher pound," he said.