UK output bottomed out in May

BRITAIN&rsquo;S economy is finally starting to stabilise, a top think-tank said yesterday. The National Institute for Economic and Social Research (NIESR) said that it was hopeful that May would prove to be the trough of economic activity.<br /><br />The news comes ahead of the Bank of England&rsquo;s crucial decision today on whether or not to extend quantitative easing. In the three months to July, gross domestic product (GDP) fell by 0.4 per cent, the NIESR estimates. This compares to a drop of 0.8 per cent in the three months to June.<br /><br />Industrial output in the three months to the end of July fell by 0.2 per cent.<br /><br />The NIESR said: &ldquo;The pattern emerging supports our view that output is now stabilising and that, in the absence of further shocks, the period of sharp recession is over.&rdquo;<br /><br />The NIESR&rsquo;s forecast that Britain was starting to recover from the worst recession since the Second World War followed a series of better-than-expected data indicating the economy could grow in the third quarter. The economy has shrunk by at least five per cent since the start of the recession.