UK Economy Experiences Modest Growth
The latest figures from the Office for National Statistics show that the UK Economy grew by more than was expected in the second quarter of 2013…
Figures released by the Office for National Statistics (ONS) this morning indicate that the UK economy has grown by more than was expected in Q2 of this year.
Data estimates for the months of April, May and June point to the UK economy having grown by 0.6%, up from the rate of 0.3% in the first quarter of the year.
The ONS estimates show that the four main industrial groups, comprising of agriculture, construction, production and services, all show growth in the period.
The service sector, which constitutes about 80% of UK economic output, contributed the greatest growth, followed by production, which had previously seen a drop in Q1. The construction industry saw an increase when in Q1 2013 it had been at its lowest level in 12 years.
Chancellor of the Exchequer, George Osborne, was quick to seize on the numbers, saying
“GDP stats better than forecast. Britain’s holding its nerve, we’re sticking to our plan, the economy’s on the mend. But still a long way to go.”
Dr Neil Bentley, the CBI’s Deputy Director-General, continued in the same vein, saying:
“This confirms our view that we are heading down the road to recovery, even if there are likely to still be a few bumps ahead.”
Bentley did, however, acknowledge that underlying conditions were weak, citing consumers being "saddled with debt" as one big concern.
Charles Levy, senior economist at the Big Innovation Centre initiative, whilst welcoming the figures, focused on the fact that innovative businsses, the ones that could potentially drive the eocnomy further, are still being straved of finance:
“Today’s GDP figures are good news, especially taken together with our apparent improving export performance. However, economic output remains 3.3 per cent below 2008 levels. We need to seize this as an opportunity to nurture the recovery and to channel funds to innovative firms.”
In June, the Big Innovation Centre published a couple of reports, highlighting that innovative SMEs are struggling for funding and that, should they be better funded, they could be drivers of the economy.
Further detail on today’s data can be found in the ONS’ GDP Product Preliminary Estimate Q2 2103.