UK economy back at pre-crisis level

Written By Unknown on Jumat, 25 Juli 2014 | 16.50

25 July 2014 Last updated at 10:36

The UK economy grew by 0.8% in second quarter of 2014, official figures show

The figures, from the Office for National Statistics (ONS), show the economy is now 0.2% ahead of its pre-crisis peak, which was reached in the first quarter of 2008.

The ONS said the economy had grown 3.1% since the second quarter of last year.

Chancellor George Osborne said: "Thanks to the hard work of the British people, today we reach a major milestone in our long-term economic plan."

The figures are the first attempt to measure the full range of the UK's economic activity.

The ONS says that although this preliminary estimate has less than half the data it needs to make a full assessment, revisions are "typically small" between the preliminary and third estimates of GDP.

Productivity

The UK's service sector is the only part of the UK economy that has passed its previous 2008 peak, although that accounts for the lion's share - almost 80% - of the entire economy.

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Other key sectors, including construction, industrial production and manufacturing, have yet to outstrip levels reached in 2008.

The UK economy is forecast to be the fastest growing among the G7 developed nations, according to the International Monetary Fund (IMF).

On Thursday, the IMF predicted the UK would expand by 3.2% this year, up from a previous forecast of 2.8%.

'Marred'

Output per head is not expected to reach its pre-crisis level until 2017, partly because productivity from those in work remains weak, along with the fact the population as a whole has grown.

The news was given a muted welcome by Chris Williamson, Markit's chief economist: "Any celebrations will of course also be marred by the fact that the milestone reminds us that it has taken some six years for the country to merely regain the economic might it had before the financial crisis struck."

Other countries recovered the output lost to the crisis much earlier than the UK. Germany regained its peak in 2010, with the US and France following a year later.

Set against that are changes due to be made to the way the ONS calculates its figures, which will be brought in in September. These may show the economy was actually stronger in 2008 than had been thought, and therefore the ground was made up sooner.

Do these figures fit in with your experience of the economy? Have you seen an improvement in your circumstances in the last few months? You can send us your comments by emailing haveyoursay@bbc.co.uk using the subject line "economy".


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