Britain emerges from recession with Olympic gold
Economy •Ticket sales, employment help lift nation’s GDP.
Published: October 25, 2012 07:45PM
Updated: February 7, 2013 11:32PM
(AP Photo/Jae C. Hong) The Closing Ceremony for the 2012 Summer Olympics was held on August but the games continued to provide a boost for Britain's economy and helped during the third quarter to pull it out of its recession.

Britain broke free of a nine-month recession in the third quarter, helped by a boost from the 2012 Olympic Summer Games, the Office for National Statistics reported Thursday.

Gross domestic product rose 1 percent in the July-September period from the April-June quarter, the office said in a preliminary estimate. That growth, which lifted the country out of its double-dip recession, was better than the 0.7 percent to 0.8 percent growth economists had expected.

“There is still a long way to go, but these figures show we are on the right track,” George Osborne, the chancellor of the Exchequer, said in a statement.

The weak performance of the eurozone, he added, serves as “a reminder that we still face many economic challenges at home and abroad.”

The statistical agency said the Olympics and Paralympics events had probably lifted growth about 0.2 percentage point through ticket sales, all of which were accounted for in the third quarter, even though tickets had been sold since 2011.

Employment and other parts of the economy are also thought to have been helped by the Olympics, the agency said. But it noted that, “It is not possible to quantify the overall impact of the Olympics, and indeed some of the activity may have displaced other activity.”

Joe Grice, the chief economist for the statistics office, told a televised news conference that the third-quarter figure had also gained by comparison with a second quarter in which growth had been held back by extra holidays associated with Queen Elizabeth II’s diamond jubilee and by “exceptionally poor weather conditions.”

British GDP expanded at an annualized rate of 4 percent. In contrast, the U.S. data, to be released Friday, are expected to show 1.9 percent annual growth for the quarter, according to a Reuters poll of economists. The eurozone economy, for which the data will be available in November, is expected to have contracted sharply.

David Tinsley, an economist in London with BNP Paribas, said the data suggested the British economy had been limping along at a rate of growth of 0.2 to 0.3 percent since the middle of the year.

“That’s weak, but contrasts favorably with the eurozone,” he said. “It underlines the difference between the European countries that are inside and outside the euro.”

Tinsley said the near-term outlook for the British economy remained “risky,” as recent manufacturing data have been cause for concern.

“The service sector has been encouraging, though,” he added.