GDP growth highest for three years

As many economic pundits predicted, the UK’s Gross Domestic Product (GDP) for the third quarter of 2013 rose by 0.8%. This is an increase from the 0.7% recorded for Q2 and the British economy’s best performance since 2010.

One of the main factors contributing to this improvement was the rise of 2.5% for the construction sector, building further on the improvement seen in the previous quarter.

House building continues to prosper from the boost given by the coalition Government’s Help to Buy initiative and the mortgage guarantees it now offers.

The service sector, representing 75% of total economic output, continued to prosper, growing by 0.7%, which itself is 0.4% above the level reached in its pre-crisis zenith, achieved in Q1 of 2008.

Both manufacturing and production grew, with manufacturing recording a rise of 0.9% and production 0.5%; however, production still remains 12.8% below its 2008 level.

Commenting on these encouraging figures, the Chancellor of the Exchequer, George Osborne, said: “This shows that Britain’s hard work is paying off and the country is on the path to prosperity. “Lots of risks remain, so we have to stick with the economic plan that has got us this far. “What’s encouraging about these figures is that it’s not just services that are growing. Construction is growing and production is growing.”

The Office for National Statistics (ONS), who compile these statistics, have now reported three straight quarters of economic expansion and, hopefully, herald a solid recovery.

As good as these figures are we are still below the levels of output achieved in 2008. Mr John Langworth, the Director-General of the British Chambers of Commerce was quoted as saying: “This is the highest quarterly increase we’ve seen in three years, so the economy is clearly moving in the right direction.

“But we are still behind a number of advanced economies, such as the US and Germany, that have managed to recover the output lost during the economic downturn. Much more needs to be done to transform our economy from being good to being great.”

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