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Economy showing signs of slowing, says think-tank

Leading think-tank, the National Institute of Economic and Social Research has estimated that in the quarter to June growth in the UK economy measured just 0.1 per cent.

This compares with the 0.5 per cent achieved in the three months to May.

The economy seems to be going through short-term cycles of recovery which are then offset by corresponding periods of slowdown.

The NIESR study revealed that a lack of sustained growth is affecting many areas of the economy.

Industry, for example, has had a tough time emulating the expansion it enjoyed in the latter part of 2010, while the services sector has been more or less flat.

According to the NIESR, a return to the pre-recession rates of growth experienced in 2008 looks to be at least two years off.

The report said: “Our monthly estimates of GDP suggest that output grew by 0.1 per cent in the three months ending in June after growth of 0.5 per cent in the three months ending in May. The effects of one-off events in April have depressed the overall quarterly growth rate.

“However, even accounting for these factors, the underlying rate of growth is still likely to be weak. These figures do not provide a picture of economic growth that would support a tightening of monetary policy at this juncture.”