Double-dip to be wiped from history

New data could show Britain avoided recession in early 2012, giving the Chancellor a fillip
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The Independent Online

The UK's double-dip recession could be erased from the history books this week, as official statisticians give the latest verdict on the economy's performance.

The Office for National Statistics' detailed "Blue Book" data will be included in the latest growth forecasts for the first quarter of the year. This is likely to herald a swathe of revisions to the previous figures.

The could potentially be a political fillip to Chancellor George Osborne, just weeks after fears of a triple-dip recession were scotched by 0.3 per cent growth in the first three months of 2013.

According to the most recent data, the economy's double-dip lasted three quarters, stretching from the final quarter of 2011 through to the second quarter of last year. An extra day off for the Queen's Diamond Jubilee was thought to have hit growth.

But a stronger performance from the UK's building industry than initially estimated in the first quarter of 2012 may mean that the 0.1 per cent decline for the wider economy is revised up to flat growth.

As a recession is technically defined as two consecutive quarters of contraction, the upward revision could erase the original double-dip from economic history.

The Bank of England has already discounted the double-dip in its own "backcasts" of previous data published with the most recent inflation report, estimating flat growth in the first three months of last year.

Deutsche Bank UK chief economist George Buckley said: "If you take the GDP figures to two decimal places the economy only shrank by 0.07 per cent at the beginning of 2012 so it will take very little for that to go higher."

Even if the double-dip vanishes, the British economy is still languishing 2.6 per cent below its pre-recession peak.

The news will come a week after Mr Osborne signalled the sale of the taxpayer's stake in Lloyds Banking group, which was bailed out during the depths of the crisis.

In his Mansion House speech to City bigwigs last week, the Chancellor said: "No recovery from such a deep and damaging global recession is going to be straightforward.

"But equally, the economic news here in Britain has been better in recent months. The economy is growing. Record numbers are in work."

However, on Thursday there was found to be a £27bn black hole in the balance sheets of five of the country's biggest lenders.