The National Institute of Economic and Social Research released its report on Thursday which estimated that the economy has rebounded strongly in January after the shock contraction in December.
The NISER – an academic body that conducts surveys and research on economic matters, released report concurs with separately conducted private sector reports, which have suggested that the economy is growing fast after the coldest December in 100 years caused it to shrink by 0.5%. NISER research estimates that the gross domestic product has grown by 0.6% over December.
“Care should be taken when interpreting the figures since they are distorted by the impact of the adverse weather at the end of last year”, said the report. “The underlying level of GDP appears relatively flat over the last few months”.
Output in the three months to January fell by 0.1%, compared to 0.5% contraction in the three months to December.
The lower reading indicates that the spare capacity of British economy is rising again, although the current output level remains 4 percent below the peak witnessed before the economic crisis.
The latest report by NISER claims its forecasts are normally within 0.2% of the estimates released by the Office for National Statistics. However the NISER, like all other forecasters, had failed to predict the economy’s contraction in December.