News

In the first quarter of 2014, figures have shown a growth of 0.8% in the UK economy.

It represents the fifth consecutive period of gross domestic product

(GDP) growth. This is the longest positive run since the financial crisis.

Gross domestic product (GDP) is a measure of a country’s economic activity, including all the goods and services produced in a given period.

The Office for National Statistics (ONS) also said the economy is now 0.6% smaller than its 2008 peak.

Chancellor George Osborne believes the figures show that “Britain is coming back”, but also that the recovery of Britain should not be taken for granted.

“The impact of the Great Recession is still being felt, but the foundations for a broad based recovery are now in place”, he added.

“The biggest risk to economic security would be abandoning the plan that is laying those foundations.”

Shadow Chancellor Ed Balls stated that although figures show positive growth, “millions of hard-working people are still feeling no recovery at all.” 

“Now that growth has finally returned, the question is whether ordinary working people will properly feel the benefit and we have balanced recovery that’s built to last.” He added.

‘Sound not spectacular’

The estimate for the quarter is recorded by ONS is a slight increase on the 0.7% recorded final quarter of 2013 and a rise of 3.1% on the same period a year ago.

Many, however, had been expecting it to be even higher, at 0.9%.

“While this figure has missed estimates, slightly, the overall feeling is still one of strength in the UK.” Said Jeremy Cook, Chief Economist at currency brokers World First.

“In fact, this is the kind of news the economy needs - solid but not spectacular.”

One of the strongest performers in the latest figures was UK manufacturing with output growing by 1.3%.

The service sector, including everything from hotels and leisure through to accountants, grew by 0.9%, accounting for almost all of the overall quarterly growth.

Construction input, which grew by 0.3%, was affected by the level of storms and rainfall in January and February; however, it did not have a significant effect on the figures.

Out of the four main industrial sectors, agriculture was the only one to register a fall, dropping by 0.7%.

In earlier April, the International Monetary Fund (IMF) said it expected the UK to be the best-performing of the world’s largest economies in 2014, with growth of 2.9% for the year.

The Independent Office for Budget Responsibility (OBR) predicts 2.7%, and in February the Bank of England (BoE) raised its 2014 forecast to 3.4%.

However the BoE has indicated it is unlikely to announce a rise in interest rates any time soon, despite the strong growth of the economy.

Its stance has been bolstered by falling inflation, which dropped to 1.6% last month, its lowest rate in more than four years.