Olympic bounce puts Britain back in the black

Growth figure exceeds expectations but ministers remain wary of declaring downturn is over

Ministers expressed cautious hopes that the economy has turned the corner but admitted doubts about the strength of the recovery after official figures showed that Britain's double-dip recession has ended.

Gross domestic product rose by one per cent between July and September, the fastest growth for five years, helped by an "Olympic bounce" from ticket sales and a comparison with the extra bank holiday for the Queen's Diamond Jubilee celebrations in the previous quarter.

In public, ministers spoke of a "healing economy" and admitted Britain still had a long way to go. In private, they conceded that some future statistics could be disappointing, making yesterday's figures "a dangerous moment" for the Government if great public expectations were raised.

Some ministers admitted that low growth is the best the Coalition can hope for until the 2015 election, fearing a "voteless recovery", because the squeeze on living standards will continue.

Such caution was justified when Ford announced 1,400 job losses and the closure of two UK sites. In another setback last night, David Cameron was rebuked by the statistics watchdog for appearing to pre-empt the GDP figures during Prime Minister's Questions on Wednesday, when he said "the good news is going to keep coming".

In a letter to the Prime Minister, Andrew Dilnot, chairman of the UK Statistics Authority, reminded him of a requirement not to disclose "any suggestion of the size or direction of any trend". A Downing Street spokesman insisted: "The PM was talking about recent good news on the economy, unemployment, crime and the health service. He did not refer to the GDP figures, and the UK Statistics Authority has not found there was any breach of the code."

Welcoming the better-than-forecast figures, Mr Cameron said: "There is still much to do, but these figures show we are on the right track, and our economy is healing."

George Osborne, the Chancellor, said Britain faced "many economic challenges at home and abroad". He added: "By continuing to take the tough decisions needed to deal with our debts and equip our economy for the global race we're in, this Government is laying the foundations for lasting prosperity." The figures will make it more difficult for Labour to repeat its claim that the longest double-dip recession since 1950 was "made in Downing Street".

Ed Balls, the shadow Chancellor, welcomed the figures but insisted that "underlying growth remains weak". He said: "A one-off boost from the Olympics … is no substitute for a plan to secure and sustain the strong recovery that Britain desperately needs if we are to create jobs, get the deficit down and make people better off."

The Office for National Statistics said the "Olympic effect" added about 0.2 per cent to the third-quarter GDP figure. It said "the underlying pattern is one of subdued economic expansion", with GDP no bigger than it was a year ago. While the service sector increased by 1.3 per cent, construction fell by 2.5 per cent.

The Confederation of British Industry expressed fears that the recovery was largely confined to the London area. John Cridland, the CBI director-general, said: "We expect conditions to remain positive going into the fourth quarter, reflecting some easing of the pressure on household budgets from lower inflation. But the global economic environment remains challenging."

David Kern, chief economist at the British Chambers of Commerce, said: "While the news is positive, the estimate must be put in context. Compared to a year earlier, the figures show that the economy is stagnant.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Digital Marketing Consultant

£28000 - £45000 per annum: Recruitment Genius: A Senior Digital Marketing Cons...

Recruitment Genius: Assistant Stores Keeper

£16640 - £18500 per annum: Recruitment Genius: An Assistant Stores Keeper is r...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Software Developer - C# / ASP.NET / SQL

£17000 - £30000 per annum: Recruitment Genius: Developer required to join a bu...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk