Updated: Tue, 16 Apr 2013 10:45:00 GMT | By Damian Clarkson, senior editor, MSN Money

Britain avoids triple-dip recession

Economic output grew 0.3% in the first quarter – a vital result for the under-pressure chancellor.


Chancellor George Osborne [image © PA]

Britain has comfortably avoided a triple-dip recession, according to official figures that show the economy grew by 0.3% in the first quarter of the year.

Following a miserable 0.3% contraction in the final quarter of 2012, many feared the economy was headed back into recession – defined as two consecutive quarters of negative growth.

But the Office for National Statistics today revealed that gross domestic product (GDP) grew by 0.3% - far higher than the 0.1% analysts had predicted.

It might seem a minor improvement, but it will prove a massive relief to George Osborne.

Critics want an end to austerity

The chancellor has been coming under mounting pressure to change economic course, with critics claiming his austerity measures are stifling economic growth.

Just last week, the influential International Monetary Fund (IMF) suggested that Osborne “take stock” of his plan A, before slashing its UK growth forecast for this year from 1% to 0.7%.

So while today’s increase in GDP is hardly a resounding endorsement of Osborne’s economic strategy, it will ease the pressure somewhat.

Certainly, if we hadn’t successfully dodged the triple-dip bullet, Labour’s claims that Osborne is an impediment to UK growth would have been given more credence.

Now, the chancellor has bought himself valuable time to try and achieve stable and lasting growth.

So how does he plan to achieve it?

As the IMF pointed out, a key problem for Osborne is that growth in the private sector is being hampered by a lack of credit.

To help get banks lending again and boost the flow of fresh capital to businesses, the government launched its much-vaunted Funding for Lending Scheme (FLS) last year.

The initiative basically gives the banks access to cheap credit on the provision that they pass it on to the private sector.

And while FLS has benefitted homeowners in the form of extraordinarily cheap mortgages, many businesses remain starved of credit.

Figures from the Bank of England showed that lending to companies slumped by £4.8 billion in the three months to February, in a clear sign that the FLS was failing this sector.

The government knows well that the success of this sector is key to pulling Britain out of the economic doldrums, and has this week dramatically ramped up the scheme with a specific focus on small to medium enterprises (SMEs).

Under the original scheme, banks can access low-interest funding in return for lending to households and businesses. Now, they are being told that the amount of funding available will be increased up to tenfold when based on lending to SMEs.

Expect uninspiring growth

Only time will tell how successful the initiative proves, but its importance can’t be overstated - the government is relying heavily on the FLS to revive our economic fortunes.

After narrowly achieving growth in this quarter (and it’s worth stressing that the figures could be revised upwards or downwards next month as more data becomes available), most analysts expect the economy to continue its upwards trend, albeit slowly and sluggishly.

But will that be enough for Osborne to claim his austerity measures are working?

88Comments
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So basically we are no better off are we we are just back to where we where at the end of 2012, up shxt creek with out a paddle.
25/04/2013 10:31
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So 'born to work' please explain to us idiots who know nothing...
1)Why unemployment and the welfare system went out of control in the 80's under Tory Thatcher. 
2) Why banks were deregulated and set free to do what they like with OUR money under Tory Thatcher. 
3) Why the banks were still allowed to run amok with OUR money under the well documented Tory Thatcher disciple Tony Blair in his very non-socialist NEW Labour. 
4) Why even now, this Tory government who are self confessed Sons of Thatcher, bails out the banks the Tories set free, with OUR money, to continue what they were doing to cause the crash THAT STARTED IN AMERICA NOT BRITAIN and as far as I'm aware there are no Socialist parties in the US. 
5) Why this government is borrowing more than any other government in history INCLUDING Socialist ones.
This country is broke because of Tory policies, no one else's, Strikes might have been a problem in the 70's under a Socialist government...but hardly anyone was on benefits unlike in the 80's and most of the 90's under a Tory government. Tories created the 'Benefits Monster' not Labour.
25/04/2013 10:20
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Yeah well done Gideon!-by taking off the sick and uemployed/employed poor or forcing them on workfare,giving the rich tax breaks you've bearly managed to  pop a strand of hair above the flood line-pathetic!.The sh*t will hit the fan soon enough.The tories have been in unelected power for 3 years and along with their useless side kick cronies LibDems have done more damage to Britain than  what Hitler could only have dreamed of.Wake up people the tories have and always will be the party of the rich.They're destroying everything us working class have gained over the past 100 years.We're walking blindly into their trap.God help the future for all of us ordinary folk if we just sit back and do nothing.
25/04/2013 10:18
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so not out of the first recession then. pity the government don't take pay cuts
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Where are the 'figures' on how many children are starving, people committing suicide & pensioners freezing to death in the uk?
25/04/2013 10:16
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Can you imagine how this dismal economic scenario would be reported if it was unfolding under a Labour government? Funny that, isn't it? The pattern of reportage never really varies. It goes like this: when the Tories are in office, they' re always about to get us out of the mess we're in, while Labour are always about to land us in one, however well we may appear to be doing at the time. Poor old Gordon Brown. None of his successes acknowledged, all his failures displayed in glorious technicolour.So the story will ever run thus: whatever our economic situation, the media, in a remarkable feat of legerdemain, can always convince the gullible that a Tory chancellor is 'clearing up the mess that Labour left.'  "Now, the chancellor has bought himself valuable time to try and achieve stable and lasting growth"MSN announces breathlessly today. You believe it if you want to. I don't.
25/04/2013 10:04
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For Andy Doig. Andy. The Barnet formula for Scotland provides more money per head in Scotland than is allocated to those in England by the government. By the way Scotland didn't join the Union as a defeated nation as modern Scottish myth would have you believe; Scotland sought the Union because England paid off the Scottish debts to the Hansiatic merchants. We just bailed you lot out again with tax payers money supporting Halifax Bank of Scotland and Royal Bank of Scotland. I remember Mr Salmon hailing Fred the Shred just before the big bust as a great Scot who had done wonderful things for Scotland. I think the UK tax payers provided in excess of £45bn to bail out two Scottish Banks. Think before you bite the hand that feeds you.  By the way it might have been a Scotsman that started the Bank of England but it was a Scotsman (Gordon Brown) that nearly broke it by selling off half the gold at knock down prices.  

25/04/2013 10:42
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Honestly - talk about spin - they can tell you anything they like and we're all gullible enough to go along with it - look at the High Street - look at the Banks (no one wants to buy into Lloyds!) - look at industry - who do they think they're kidding!!
25/04/2013 10:02
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what is the obsession with "growth" economies just like a baloon can grow and grow upto a point and then pop.    id much prefer 100 years of constant 0.5% growrh than the usual 30-40 years of boom and bust.  so what if china or india or the like have higher growth. 99.9% of this country are still better off than them.    if the economy becomes balanced who gives a damn about a percentage. 
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MUST BE NICE WHEN YOU STAND BEFORE MILLIONS AND LIE YOUR ARSE OFF.

ITS ALRIGHT FOR ALL OF THEM, THEY HAVE THOUSANDS OR MILLIONS COMING INTO THERE BANK ACCOUNTS.

I HAVE NOTHING, NOT EVEN JOB SEEKERS ALLOWANCE, I DON,T KNOW WHAT IM GOING TO DO TO PAY BILLS.

ANY JOBS OUT THERE FOLKS,   DOES ANYONE REALLY CARE AT ALL.

25/04/2013 10:31
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Don't relax yet Mr Osborne your fiscal problems are only going to get worse much worse .
25/04/2013 10:35
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what a plank won't take sound advice from anybody else

typical Tory

25/04/2013 11:17
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Could it have been born to work that took my comments off, was it a case of couldn't accept the facts, could it be that he/she would have preferred to listen to the lying propaganda of the Tories, Is born to work voting Tory because it raises his status, in his/her head anyway.   Well born to work I too worked all my life and was fortunate enough to work through the times of prosperity for the workforce, enjoyed a few modest luxuries and with a full time job didn't have to go cap in hand to the welfare, I could even pay my rent without handouts.   My generation enjoyed a life without stress and worry, unlike our parents did, we had hoped our children and grandchildren would have enjoyed similar, unfortunately along came Maggie and destroyed our industry, unions that were/are our only protection from the greedy capitalist employers and put by 1985 3.5 million out of work.   You claim Labour put us in the mess we are in, well read a few facts instead of letting your self be brainwashed by the posh boys. In the 1970s our National Debt was £33.1 billion, by 1997 it was £352 billion despite all the income from the sale of our nationalised industries.   Labour it is claimed kept our National Debt to manageable proportions, in fact for three years in the early 2000s had surplus to spending.  Then along came the banks going belly up and necessitated a massive borrowing programme, however the last three quarter of the Labour government we were starting to recover, the last quarter of the Labour government showed a growth of 1.4%.  The first quarter of the Tories growth was 0.8% and we have gone down hill ever since.   Our National Debt in 2010 was around £890 billion it now stands at £1.186 trillion and we have lost our triple A rating.  By the way copied and saved this post.
25/04/2013 10:11
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Heard it all now, the Sweaty socks are propping us up  lol   

25/04/2013 11:39
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Fiddling with figures again to look good.
25/04/2013 11:08
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bet he cooked the books to achieve even that..
25/04/2013 12:10
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Manufacturing DOWN

Construction DOWN

Two key industries that help the economy grow

 

To days news

Service sector UP 0.6%

Service sector jobs include

 money lenders, bookmakers, pawn brokers and charity shops

Tory economics at their worst I fear

25/04/2013 12:52
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Smug Osborne will claim credit for this, but all the negative results he's blamed on 'someone/something else'. That's the only growth industry in the UK: Osborne's excuses.
Everything except 'leaves on the line'! It's about time this wretched government took responsibility
for its actions and inactions.
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Get people like Primark to open factories in the UK .The way it is we will always struggle with our economy..Stop a lot of imports..
25/04/2013 10:13
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I bet the BBC are gutted. They spent an hour and a half this morning telling us what it would mean if we were thrust into a triple dip recession. No mention of what it would mean if we weren't. Oh well, there is always next time to look forward to for the independent, unbiased BBC!
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