June 11, 2008 | posted by Michael Baxter in UK economy |

Growth in the UK economy slowed to a snail’s pace in May, suggests the latest estimates from the National Institute of Economic and Social Research.

In its latest estimates, out yesterday, it had quarterly growth in the three months to May of just 0.2 per cent.

This contrasts with 0.4 per cent growth in the three months to April.

So, does this spell recession?

The NIESR said: “Although the May figure is very low and output growth could slow further, the time profile for growth late last year still makes it unlikely that taking the year as a whole, output will be lower in 2008 than in 2007.”

Then again, with growing expectations that the next change in the interest rate will be up, the prognosis for the UK seems to be getting worse.

Remember that many forecasters, including, recently, the OECD, have predicted that 2009 will be worse than this year.    If you believe the UK economy runs between 12 and 18 months behind the US, then it certainly seems probable 2009 will be the year the economic cycle hits bottom.  So, if growth is just 0.2 per cent a quarter now, the omens for 2009 are not good.

Quarterly growth and estimated quarterly growth – NIESR

Jan-07   Feb-07   Mar-07   Apr-07   May-07   Jun-07   Jul-07   Aug-07   Sep-07
0.80%    0.70%     0.70%     0.70%     1%            0.80%    0.80%   0.60%     0.60%

Oct-07   Nov-07   Dec-07   Jan-08   Feb-08   Mar-08   Apr-08   May-08
0.70%    0.60%     0.60%    0.50%     0.60%     0.40%     0.40%     0.20%