Partly Cloudy

Partly Cloudy

max temp: 19°C

min temp: 11°C

ESTD 1874 Search

Economy: UK output back above pre-recession peak after 0.8% growth in second quarter GDP

09:57 25 July 2014

Chancellor of the Exchequer George Osborne.

Chancellor of the Exchequer George Osborne.

Archant

Britain has finally emerged from its worst post-war downturn after growth of 0.8% in the second quarter of 2014 took the size of the economy above its pre-recession peak.

shares

The performance left the UK’s gross domestic product (GDP) 0.2% ahead of its level at the start of 2008, the Office for National Statistics (ONS) said.

It marks the end of a period when GDP slumped to 7.2% below its pre-recession levels by the middle of 2009.

The stuttering recovery did not take flight until last year when growth began to accelerate.

But Britain is now predicted to be the fastest growing major world economy in 2014. Yesterday the International Monetary Fund (IMF) raised its GDP forecast for the fourth time in a row to 3.2%.

Commenting on the figures, Chancellor George Osborne said: “Thanks to the hard work of the British people, today we reach a major milestone in our long-term economic plan.”

Today’s figures showed that GDP was 3.1% higher in the second quarter compared with the same period a year ago, the highest such year-on-year increase since the last quarter of 2007.

The 0.8% growth for the second quarter, which was widely forecast, was primarily driven by the powerhouse services sector, which accounts for three-quarters of output, and grew by 1%.

But expansion in the manufacturing sector slowed to just 0.2% while construction shrank by 0.5%, dragged down by a weak May for builders. For both sectors it was the worst quarter since the start of 2013.

The figures mean that while the services sector is now 2.9% ahead of its level at the start of 2008, manufacturing is still 7.4% behind and construction lagging by 10.7%.

The continuing pace of the recovery, with growth maintaining the pace of the first three months of the year, will feed into expectations about the timing of an interest rate rise. Accelerating signs of economic improvement have seen these brought forward.

However, critics of the Coalition point to evidence that it is not yet filtering through to ordinary households as real terms pay is falling.

Latest figures show while employment levels are improving strongly, pay growth has fallen to just 0.3%, lagging well behind inflation at 1.9%.

Opponents of the Government also point to the measure of GDP per head, which in the first quarter of this year was 5.5% below the peak. The measure for the second quarter is not yet available.

shares

2 comments

  • i wish i could see my bank account change so easy.

    Report this comment

    TERENCE MANNING

    Saturday, July 26, 2014

  • Osborne has been 're adjusting' the figures again !, you can make 'statistics' say exactly what you want them to say if you 'present' them in the right way !. there are 'Lies, Damned Lies and then Statistics' !

    Report this comment

    freedomf

    Friday, July 25, 2014

The views expressed in the above comments do not necessarily reflect the views of this site

Uncertainty over Government policy is holding back potential investment in the offshore wind sector, according to East of England Energy Zone director James Gray.

The absence of a clear Government stategy is leaving the offshore wind industry “in limbo”, according to a leading figure within the sector in East Anglia.

File photo dated 31/07/07 of a Greggs shop. The bakery chain said sales jumped almost 20% before Christmas as shoppers refuelled at its stores during a last-minute rush to the high street. PRESS ASSOCIATION Photo. Issue date: Wednesday January 12 2011. The snow disrupted shopping patterns in the earlier part of December but Greggs said the record Christmas week meant sales were still higher in the five weeks to January 8 - up 0.6% on a like-for-like basis and 3.5% overall. Total sales in Christmas week were up 19.6% and by 16% at a same-store level. See PA story CITY Greggs. Photo credit should read: Tim Ireland/PA Wire

Higher breakfast sales and a bigger range of healthier products helped Greggs grow underlying profits by 51% in the first half of the year.

Barclays chairman 

John McFarlane.
Photo: VisMedia

Barclays boss John McFarlane today signalled plans to ramp up growth, squeeze costs and streamline the business after announcing a 25% rise in first half profits.

The rate of growth in the UK economy rebounded during the second quarter of 2015, but the manufacturing sector continued to struggle, according to official figures.

UK growth bounced back in the second quarter of 2015 as gross domestic product (GDP) increased by 0.7%, according to official figures.

Ransomes Jacobsen operations director Simon Rainger addresses staff as the company's last Ransomes Commander mover leaves the production line.

Staff at Ipswich-based turf maintenance machinery maker Ransomes Jacobsen have marked the end of an era, with the last Ransomes Commander mower having rolled off the production line.

Charles Manning on the new patio area at Bears Boutique Bar and Bowling in Star Lane, Ipswich

Businessman Charles Manning is pleased with the way his Bears bowling bar and grill is fitting into the entertainment offer in Ipswich – and with the business community.

Barker Gotelee has welcomed Lucy Underwood, conveyancing assistant, Linda Crawford, solicitor, Nicky Sunderland. trust and estate planning practitioner, and Lisa Hobbs, junior secretary.

Ipswich-based law firm Barker Gotelee has welcomed four new employees across its expanding business.

A Ryanair aircraft atStansted Airport.

Budget airline Ryanair today reported a 25% jump in earnings for the first quarter of its new financial year.

Alton Towers in Staffordshire.

Alton Towers owner Merlin expects annual earnings for its theme parks business to drop by as much as £47million this year following last month’s rollercoaster crash.

Artist's impression of how an office development in Sheepen Road, Colchester, could look

A council has managed to secure tenants for a new office development before work has even begun on building it.

Most read

Most commented

Topic pages