Britain emerges from recession with 1.0% growth

Britain has exited its longest double-dip recession since the 1950s after its economy returned to growth in the third quarter with a strong gain of 1.0 percent, official data showed on Thursday. Gross domestic product, or combined value of produced goods and services, rose much stronger than expected during the July-September period after contracting in the previous three quarters. Market expectations had been for the economy of Britain, which is not part of the eurozone, to have expanded by 0.6 percent in the third quarter compared with the second after falling into a double-dip recession in late 2011. "GDP was estimated to have increased by 1.0 percent in Q3 2012 compared with Q2 2012," the Office for National Statistics said in a statement. "The largest contribution to the increase came from the services sector. There was also an increase in activity in the production sector. Activity in the construction sector fell." Growth was also affected by one-off factors, including the London 2012 Olympic Games and rebounding activity after an extra public holiday for Queen Elizabeth II's Diamond Jubilee, the ONS said. Output was meanwhile flat in the third quarter compared with the equivalent period in 2011, it added. Britain escaped from a deep downturn in late 2009 but fell back into recession at the end of 2011. GDP contracted by 0.4 percent in the second quarter of this year after shrinking by 0.3 percent in the first -- and by 0.4 percent in the final quarter of 2011. Despite emerging from recession, economists warned that Britain faced considerable difficulties, not least from tight credit conditions and worries about an ongoing debt crisis in the eurozone, a key trading partner. Other major headwinds include rising inflation on higher energy and food prices, the uncertain jobs market and ongoing austerity measures from Britain's coalition government.