No double dip as economy grows 0.5% in Q1

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The UK economy grew by 0.5% in the first quarter of the year, down slightly on economists' forecasts, the Office for National Statistics (ONS) said in its first estimate today.

It follows a contraction of 0.5% in the final three months of last year, which followed growth of 0.7% in Q3 2010. Ahead of today's estimate, analysts had predicted a modest growth figure of around 0.6% to 0.7%. The pound rose more than 0.4% against the dollar to $1.6519 in trading following the announcement, whilst the yield on the benchmark two year gilt rose two basis points to 1.102%. The FTSE was little changed, trading 15 points lower at 6,054. Schroders describes today's figures as "very stagflationary," while Capital Economics said the UK's underlying growth remains flat...

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