U.K. growth meets forecasts

The U.K. economy avoided falling into a double-dip recession at the beginning of the last year, though household living standards are suffering their biggest drop in a generation at the start of 2013. The data from Office for National Statistics showed on Thursday that after a major annual revision of historic economic data, economic output was flat in the first three months of 2012, rather than contracting as previously thought. This means the economy did not contract for two consecutive quarters, which is a definition of a recession. At the same time, the final estimate for the GDP confirmed the economy expanded 0.3% in Q1 this year, while the growth over the year to the first three months was revised down 0.6% to a 0.3% gain. 

Despite some positive data, real household disposable incomes tumbled 1.7% from the previous quarter, the most since 1987, dragged down by an outright drop in wages and rising prices. Moreover, the nation's current account deficit surprisingly widened to 3.6% of the GDP, while business investment plunged 16.5% on the year, casting doubt on hopes that the recovery was driven by exports and capital spending. In addition to that, domestic demand remains subdued due to the government's spending squeeze, suggesting the recovery may not gather pace as expected.