Britain faces two years of slow growth

WEAK growth is still plaguing Britain at the start of the new year and sluggish growth will continue for the next two years, the respected think-tank the National Institute for Economic and Social Research (Niesr) forecast yesterday.

The think-tank said that UK output grew 0.3 per cent in the three months ending in February after expansion of 0.6 per cent in the three months to January. It concludes, rather gloomily, that it does not expect output to pass its peak at the start of 2008 until 2012.

But Niesr said that the figure for the three months to January reflects a comparison of the period November 2009 to January 2010 with August to October 2009, when the economy was extremely weak.

Importantly, it points out that it considers “the estimate of the growth rate in the three months ending in February 2010, as compared with the period September to November 2009, offers a better indication of the underlying current progress of the economy”.

It also notes in its monthly forecast that output is 0.7 per cent higher in February than at the trough of the depression, which it currently places in September 2009.