UK economy now growing at fastest rate since 2007

Latest figures that Britain has now recovered the lion’s share of GDP lost during recession

Figures provide boost for British chancellor George Osborne after the International Monetary Fund recently upgraded its forecast for growth in Britain. Photograph: Stefan Rousseau/PA Wire

Figures provide boost for British chancellor George Osborne after the International Monetary Fund recently upgraded its forecast for growth in Britain. Photograph: Stefan Rousseau/PA Wire

 

Britain’s economy grew by 1.9 per cent last year, the fastest pace since 2007, official figures showed today. The pace of expansion slowed slightly to 0.7 per centin the fourth quarter after the construction sector shrank due to a poor performance in November.

But the figures from the Office for National Statistics (ONS) suggested that the UK has now recovered the lion’s share of gross domestic product (GDP) lost during the recession.

ONS chief economic adviser Joe Grice said: “We have now seen four successive quarters of significant growth and the economy does seem to be improving more consistently. “Today’s estimate suggests over four-fifths of the fall in GDP during the recession has been recovered, although it still remains 1.3 per cent below the pre-recession peak.”

In 2007, the last year when the pace of growth was faster, the economy grew by 3.4 per cent. In 2012, growth was just 0.3 per cent.

Today’s figures show the scale of improvements in the economy’s prospects, a year after it was feared that the country was about to sink into an unprecedented “triple-dip” recession.

They provide the latest boost for British chancellor George Osborne after the International Monetary Fund recently upgraded its forecast for growth in Britain - just months after the body told the government it should rethink its austerity strategy.

But the surprise pace of growth in 2013 saw the economy grow by 0.5 per centin the first quarter and 0.8 per cent in the second and third three-month periods of the year. The estimated fourth-quarter figure of 0.7 per cent marks a slowdown as the overall performance was dragged down by the construction sector, which shrank by 0.3 per cent .

This was largely the result of a 4 per cent slump in November — which has previously been disclosed — despite support from Government schemes such as Help to Buy. Construction remains 11.2 per cent off its pre-recession level in the first quarter of 2008.

Manufacturing improved by 0.9 per cent in the fourth quarter. The sector remains 8.2 per cent off pre-crisis levels. Services, which represent three quarters of UK economic output, improved by 0.8 per cent. It is now above 2008 levels.

PA