The pace of economic growth may have softened in the three months to August, the Institute said, but it is still a robust rate for the UK.
“Unfortunately, the rate of growth will continue to decelerate over the coming months. These recent numbers do not alter our view that the MPC will hold off from raising interest rates until the summer of next year,” it added.
The National Institute interprets the term “recession” to mean a period when output is falling or receding, while “depression” is a period when output is depressed below its previous peak.
“Thus, unless output turns down again, the recession is over, while the period of depression is likely to continue for some time. We do not expect output to pass its peak in early 2008 until 2012,” the Institute said.
And it added: “Our track record in producing early estimates of GDP suggests that our projection for the most recent three-month period has a standard error of 0.1-0.2% point when compared to the first estimate produced by the Office for National Statistics.
“This comparison can be made only for complete calendar quarters. Outside calendar quarters the figures are less reliable than this and they are also likely to be less accurate in the current disturbed economic circumstances.”
