BRITAIN’S economy failed to expand in the third quarter of 2009, a leading think tank forecast yesterday, dashing hopes that the UK would start to experience modest growth.
The National Institute for Economic and Social Research (NIESR) said that the disappointing figures were because of much weaker than expected industrial production in August.
Figures from the Office for National Statistics (ONS) showed yesterday that industrial output plunged 2.5 per cent in August while the narrower measure of manufacturing output fell by 1.9 per cent in August compared to a downwardly revised rise of 0.7 per cent in July.
The falls in manufacturing in August offset the gains made over the previous two months so that the overall change over the third quarter was flat. Total production output was 10.4 per cent lower compared to the same period of 2008.
Capital Economics’ Vicky Redwood said: “August’s dismal industrial production figures will dampen some of the recent optimism about the economy’s apparent bounce-back.”
She added: “Even if all of August’s drop were reversed, industrial production would still barely rise in the third quarter overall.”