UK economic recovery gathers momentum
ONS figures show pace of growth strongest since 2007
The UK economic recovery is gathering pace, with the rate of growth the strongest since before the recession, according to figures released by the Office for National Statistics (ONS).
ONS statistics released today showed that the UK economy grew by 1.9% across 2013, the strongest rate since 2007.
But growth in gross domestic product slowed slightly in the fourth quarter of 2013, slipping to 0.7%, from 0.8% in the previous quarter.
In addition, total economic output is still 1.3% below its 2008 first quarter level, suggesting the recovery still has some way to go to match pre-recession levels.
The pace of growth has exceeded the independent Office for Budget Responsibility (OBR)’s forecast, which was revised from 0.6% up to 1.4% in December.
The OBR is currently forecasting growth of 2.4% across 2014, a figure that may also have to be revised if the current rate continues.
Broken down by sector, the UK’s service industry – which makes up more than three quarters of economic output – grew by 0.8% in the fourth quarter of 2013, matching its performance in the previous quarter.
The UK’s manufacturing sector also saw strong growth, expanding by 0.9% in the same period.
In construction, the sector saw a slight contraction – falling by 0.3%, despite the recent recovery in the housing market.
Chancellor George Osborne welcomed the figures, saying in a statement: “These numbers are a boost for the economic security of hard-working people. It is more evidence that our long-term economic plan is working.
“But the job is not done, and it is clear that the biggest risk now to the recovery would be abandoning the plan that’s delivering jobs and a brighter economic future.”
Andrew Hunter, former Young Gun and co-founder of listings site Adzuna, told Growing Business: “This morning’s figures signal a new dawn for the UK economy. We’ve seen continual growth across each quarter for the first time since 2007, which has unlocked more jobs and allowed unemployment to fall consistently for the last 6 months.
“But a 1.9% annual growth is still some way off the pre-downturn peak of 2008, and despite the brightening economic mood, there are still some clouds lingering on the horizon.
“Growth levels across different industries reveal more of a mixed bag. Although the services sector steamed ahead, the construction sector actually shrunk in the last quarter, while production and agriculture remained fairly static.
“In addition, our jobs data reveals that while the number of vacancies in the UK has grown in the past year, advertised salaries have actually fallen.
“With no immediate signs of this changing, the decline in real wages remains a thorn in the side of our economic recovery, affecting families the length and breadth of the country.”