UK economy grows at fastest pace in three years

The UK economy grew at its fastest pace for three years in the third quarter of the year as gross domestic product (GDP) increased by 0.8 per cent, official figures showed today.

It was the third successive period of improving output and the best performance since the second quarter of 2010, the Office for National Statistics said.

The figures, which were in line with expectations, saw all sectors of the economy grow, including a 2.5 per cent surge in construction.

Chancellor George Osborne said on Twitter: "This shows that Britain's hard work is paying off & the country is on the path to prosperity."

Overall GDP was 1.5 per cent ahead of the same period last year — a strong comparison with a time when the economy was boosted by the Olympics and Paralympics.

The year-to-year rise is higher than the 1.3 per cent improvement at the end of this year’s second quarter.

But the economy remains 2.5 per cent off its pre-recession peak at the start of 2008.

During the third quarter, construction was boosted by new work on private housing and private commercial building as well as domestic home repair and maintenance.

Housebuilders have been buoyed by the Government’s Help to Buy scheme, which recently launched a new phase offering mortgage guarantees.

However, construction remains 12.5 per cent off its pre-crisis peak.

Production grew by 0.5 per cent, though this remains 12.8 per cent off its 2008 level, while within this manufacturing improved 0.9 per cent in the third quarter. It is 8.9 per cent off the level five years ago.

Meanwhile, the powerhouse services sector, which represents three-quarters of economic output, grew by 0.7 per cent and is now 0.6 per cent above its pre-crisis peak.

The largest contributions here came from business services and finance, followed by distribution, hotels and restaurants.

PA