By ADRIAN LOWCOCK 24/07/2009
End of recession in sight
The National Institute of Economic and Social Research (NIESR) predicted that Britain’s economy is expected to return to growth during the last quarter of this year. However, they do not expect the economic recovery to be strong and only predict a return to pre-credit crunch growth levels by 2013.
NEISR also forecast modest growth of 1% in 2010 and are more upbeat than that of the International Monetary Fund (IMF), which last week predicted growth of 0.2% next year.
Economy shrinks at fastest rate in 50 years
Estimates from the Office of National Statistics (ONS) for the three months to the end of June, suggested the UK Economic productivity, as measured by Gross Domestic Product (GDP), dropped by 0.8% resulting in a year on year fall of 5.6%, the worst annual performance since 1955.
UK GDP has now fallen for five consecutive quarters and the ONS has said that every sector has experienced a decline in productivity and the fall is larger than the 0.3% predicted by analysts.
House prices fall year on year
According to property company Rightmove the asking price for homes in England and Wales are an average of 3.1% lower in July, than they were a year ago. Prices rose 0.6% during the month, adding strength to the view that the property market has found a floor.
With no signs of increases in mortgage lending and an easing of deposit requirements expectations are that whilst we may experience stabilisation there will be little to encourage the market to grow.
Retail sales surge in June
Retail sales rose three times more than predicted in June as the heatwave brought out the shoppers. The ONS reported sales volumes rose 1.2%, reversing a fall of 0.9% in May. Clothing sales were the main drivers of the increase, along with footware and textiles. Retailers bringing forward their summer sales, also contributed to the rise, with prices being 6.7% lower than a year ago.