Britain leads the way in the West with 3% growth
Economy expands at fastest rate for 6 years
BRITAIN’S economy is roaring ahead at a faster pace than that of any other developed country.
National output grew 3.2 per cent between the second quarter of 2013 and the same period this year, revised estimates for the UK showed yesterday.
That puts it comfortably ahead of other major economies in the G7 including the US – and contrasts starkly with the ongoing economic malaise in Europe.
Chancellor George Osborne described the figures as good news but issued a warning over the dangers to Britain from the Eurozone.
In a message posted on Twitter he pointed towards the ‘risks from weak eurozone’.
The revised figures from the Office for National Statistics nudged gross domestic product (GDP) up from the previous estimate of 3.1 per cent.
The economy has grown for six consecutive quarters and is now registering higher growth than at any time since the end of 2007. That compares with growth in the US of 2.4 per cent. Japan is in the doldrums, with its economy contracting 0.1 per cent. The figures were released just 24 hours after further glum economic news f rom Europe, which raised fears that the eurozone could fall into a triple-dip recession.
The 18 economies i n the single currency registered no growth at all i n the three months to the end of June. Germany – the continent’s biggest economy – shrank by 0.2 per cent, following growth of 0.7 per cent in the first three months of the year. The French economy stagnated for the second quarter in a row.
Economists warned that weak growth in Europe – our biggest trading partner – would ultimately harm the British economy. It will also make it more difficult for ministers to achieve their goal of growth built on exports rather than domestic consumption.
A detailed breakdown of the figures showed strong growth in the services sector, which grew 1 per cent, while manufacturing grew 0.2 per cent.
The construction industry stalled, compared to previous estimates of a 0.5 per cent contraction. The data confirmed that, as suspected, the UK climbed out of its longest downturn since the Second
‘Weak growth in Europe’
World War, with GDP passing its 2008 pre-recession peak by 0.2 percent.
This week the Bank of England revised upwards its forecast for GDP growth this year from 3.4 per cent to 3.5 per cent.
But prospects of interest rate rises before the end of the year were dampened by figures showing wages still stagnating.
Bank of England Governor Mark Carney said the growth in average earnings was r e markably weak , and indicated rates are unlikely to rise until early next year.
It was long anticipated that rates would rise from their historic low of 0.5 per cent – but economists now predict the rise will be delayed.#
The Bank this week cut its forecast for wage growth, saying it now expects average earnings to grow by just 1.25 per cent in 2014.
A Treasury spokesman said: ‘Today’s figures confirm that our economy has recovered all of the output lost in the Great Recession and is now bigger than its previous peak in the first quarter of 2008. The Government’s long-term economic plan is working, with the economy growing at its fastest annual rate in six years.
‘But the job is not yet done and so we will go on making the realistic assessment of what needs to be done to secure a brighter economic future.’ ÷ Efforts by Nick Clegg and Danny Alexander to suggest that three million jobs would be at risk if Britain left the European Union have been contradicted by Treasury officials.
The claim, made repeatedly by senior Lib Dems, is used to argue that exiting the EU would be a disaster for the economy.
But civil servants make clear in a letter that the figure is ‘not an estimate of the impact of EU membership on employment’.