British economy is recovering, say economists

The British economic recovery is now moving at a robust pace equivalent to about 3 percent growth per annum, according to economists at the National Institute for Economic and Social Research (NIESR).

The NIESR said Friday the estimated growth in the economy in the month ending August is 0.9 percent, up from the rolling three-month total of 0.7 percent till the end of July, reports Xinhua.

The increase is the fastest growth since the three months ending in July 2010, which registered a 0.9-percent rise.

"Our latest estimate for GDP expansion is 0.9 percent for the three months till August," NIESR principal research fellow Simon Kirby said.

"It is a growth rate of 3.25 percent per annum, which is a fairly robust pace for the economy, when you consider the potential rate of growth is usually around 2 percent per annum."

However, the British economy still has some way to recovery from the negative effects of the financial crisis and the subsequent recession.

NIESR figures showed that the British GDP is still 2.7 percent lower than its peak in January 2008.

"We have had four or five months of robust figures, and the question is 'can this be sustained through to the end of this year and into next year?' And I think the answer is that it is unlikely, and we should expect to see some softening in the rate of growth," Kirby said.

Kirby said that much of the stimulus for growth was currently coming from domestic demands, particularly consumer spending.

He warned that until wages were growing at a faster pace than the rate of price inflation, it would be difficult to sustain a recovery at this level.

There are also external headwinds, with the euro area crisis remaining a major issue, warned Kirby.