According to today’s figures from the Office for National Statistics (ONS), the UK economy only grew by 0.5 percent between January and March 2011. But apparently this wasn’t too much of a surprise and is pretty similar to what happened during 2010’s last quarter, which was blamed on poor weather conditions. But in terms of this quarter, there was also a nearly 5 percent drop in construction which is the largest depletion since the first quarter of 2009 which was explained due to the country’s recession at the time.
Good News for UK
However, in spite of all this not-so-good news, it is pretty impressive that Britain’s economy has managed to “avoid a double-dip recession.” Still, the country has to watch out since just estimates from yesterday indicated that the GDP figures are only “the first of three and the figures could be revised up or down in the coming months.” This is also because we only have access to 40 percent – less than half – of the data. But still, what we know today will probably lead to a maintenance of these historically low interest rates by the Bank of England’s Monetary Policy Committee (MPC).
Further, there has been some good news for those working in mortgages. The BBA (British Bankers’ Association) pointed out the slight escalation in the amount of mortgages gaining bank approval (around a thousand more than last month’s figures). Still, you have to look at what’s been going on during other times too to get a real picture. For example, last year in March, mortgage approvals were significantly higher – 10 percent in fact. So even though things do “look” a little better for now, the reality is that they’re not that great if you look at what was happening a year ago.
In addition, figures we’re looking at today don’t make it look like the housing market is going to be doing any major uplifts in the near future. Because of “economic uncertainty and ongoing mortgage restrictions” there are definite issues that have to be dealt with.
So while there is some kind of optimism in the UK’s housing market, there is clearly still some cause for concern. Britain still has a way to go to get back to figures for this time last year but there is definitely hope that it’s on its way.