GDP figures throw spotlight on the economy

Crucial figures released today are expected to reveal whether the UK economy has rebounded from a shock decline and is tough enough to withstand the Government’s severe spending cuts.

Economists expect gross domestic product (GDP) – a broad measure for the total economy – to have grown by anything from 0.2 per cent to 1.2 per cent in the three months to March following the surprise 0.5 per cent contraction in the final quarter of 2010.

But analysts have warned anything less than 1 per cent will be disappointing, and the figures are likely to show average growth over the last two quarters was broadly flat.

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The figure from the Office for National Statistics is subject to revision but puts the coalition Government’s deficit-busting plans under the spotlight once again.

Bank of England policy-makers want to know if the economy can withstand an interest rate rise, as inflation is still well above the Government’s 2 per cent target.