UK should start seeing growth in the next six months, according to the Organisation for Economic Cooperation and Development (OECD).
After 10 months of decline, the OECD’s index stabilised in December and grew 0.1 per cent in January.
The world’s leading economies are showing signs of expansion this year, with the Eurozone, US, and India all showing growth for January, according to their respective OECD indicators.
The US in particular had a positive start to the year by improving by 0.7 per cent, equalling its growth in December, suggesting the American economy has regained momentum.
The outlook was less positive for Brazil and China, which both declined. Despite this, the OECD’s overall leading indicator showed a 0.4 per cent growth for January.
IHS Global Insight said it expects the UK to eke out modest growth in the first quarter, likely to be below 0.3 per cent.
Chief UK and European economist Howard Archer said: “Data and surveys for January and February combined have been modestly improved overall compared to the fourth quarter of 2011, although an unexpected drop in industrial production in January and a slowdown in services expansion in February provided stark reminders that the UK economy is not yet out of the woods.”
Due to these headwinds, and the upcoming public holiday for the Queen’s Diamond Jubilee, IHS does not expect the UK’s modest growth to develop until the second half of 2012.