So it’s official: the UK economy grew by 1 per cent in the third quarter of 2012, according to the ONS’s preliminary estimate. That’s significantly better than the consensus forecasts. As all the politicking and pontificating begins, there are a few caveats worth keeping in mind:-
1. It’s just an estimate. As I showed yesterday, the margin of error in the ONS’s preliminary estimates is +/– 0.7 percentage points. That means Q3 growth could really turn out to have been anything from 0.3 per cent to 1.7 per cent. Still, we can be confident that the economy did return to growth in the quarter, ending the double-dip recession — though this may have been thanks to some one-off factors, which brings us to…
2. The Diamond Jubilee. The extra bank holiday in June was estimated to depress Q2 growth by around 0.5 points, and so artificially inflates this quarter’s figure by 0.5 points, since we were starting from a lower base.
3. The Olympics. The ONS estimates that ticket sales for the Olympic Games boosted Q3 growth by about 0.2 percentage points. That’s consistent with a previous estimate by the Bank of England. Without the Olympics and the Jubilee, then, it’s likely that today’s figure would be more like 0.3 per cent.
Subscribe to The Spectator today for a quality of argument not found in any other publication. Get more Spectator for less – just £12 for 12 issues.