The UK economy grew by 1.9% in 2013, its strongest rate since 2007, according
to the Office for National Statistics (ONS) today.
GDP (gross domestic product) increased by 0.7% in the fourth quarter of 2013.
The largest contribution to
the increase came from the services sector, which increased by 0.8%.The increase
in GDP followed growth of 0.8% in Q3 2013. In the latest quarter there was
widespread growth, with increases in three of the four main aggregates.
Output increased by 0.5% in agriculture, 0.7% in production, 0.8% in services
and decreased 0.3% in construction.
The UK's service sector - - which accounts for
more than three-quarters of economic output - - rose by 0.8% in the fourth
quarter, the ONS said, matching its performance in the previous quarter. And the
manufacturing sector grew 0.9%.
Economic output remains 1.3% below its 2008 first quarter level.
"We've seen growth in most parts of the economy," said Joe Grice, chief
economist at the ONS, while George Osborne, chancellor of the exchequer,
said: "These numbers are a boost for the economic security of hard-working
people. It is more evidence that our long-term economic plan is working.
"But the job is not done, and it is clear that the
biggest risk now to the recovery would be abandoning the plan that's delivering
jobs and a brighter economic future."
Ed Balls, Labour's shadow chancellor, said: "Today's growth figures
are welcome and long overdue after three damaging years of flatlining.
"But, for working people facing a cost-of-living crisis, this is still no
recovery at all."
GDP was 2.8% higher in Q4 2013 compared with the same quarter a year ago. GDP
is estimated to
have increased by 1.9% between 2012 and 2013.
There was an upwards contribution from the production sector, which grew by
manufacturing increasing by 0.9%.
The ONS said today that GDP in the UK grew steadily from 2000 until early 2008, at which point a
financial market shock
affected UK and global economic growth. Up until that point, services in the UK
had continued to
grow steadily, while production output had been broadly flat over the same
activity grew strongly in the early part of the decade and although there was a
in the mid-2000s, this was reversed by the end of 2007. The deterioration in
conditions during 2008/09 was more acute in the construction and production
industries, but less
pronounced in the services industries.
Economic growth resumed towards the end of 2009, but at a slower rate than
the period prior to
2008. The services industries grew steadily, if slowly, during this period, with
activity exceeding the
level previously seen in early 2008 by Q3 2013. By contrast, production and
grew in 2010 but did not sustain this growth, and as a result have not yet
returned to their pre-downturn
peaks of activity. Although there has been growth across all industrial
agriculture (which accounts for less than 1% of GDP and is highly volatile),
when comparing Q4
2013 with Q4 2012 the service industries remain the primary contributor to
From the peak in Q1 2008 to the trough in Q2 and Q3 2009, GDP decreased by
economic downturns in the early 1980s and early 1990s did not see the same level
of impact on
GDP. In the early 1990s downturn, GDP decreased by 2.9% from the peak in Q2 1990
to the trough
in Q3 1991. . From Q2 1979 to Q1 1981, a period which included a quarter of
positive growth, GDP
decreased by 5.9%; over five consecutive quarters of falling GDP beginning in Q1
decreased by 4.6%.
The figures came as the
CBI, the UK's leading business lobby group, unveiled its new monthly Growth
Indicator, which showed the volume of output in the three months to
January grew at the fastest pace since late 2007.
John Cridland, CBI
director-general, said: “The economy is growing and the
recovery gathering momentum. This is good news, and we’re seeing improvement
across many different sectors.
“Our new Growth Indicator echoes
this building confidence, showing that output in last three months grew at the
fastest pace since late 2007, with strong performances in business and
professional services, and manufacturing.
“This is a strong platform for an
even better year in 2014, and we expect the economy to continue to strengthen.”
Howard Sears, founder of Astuta, a small business investment firm said: "The economy is back with a bang. After last week's strong jobs numbers,
there is every reason to believe the economic recovery is in full swing.
"There is certainly a lot more confidence in the small business
community. Companies are starting to invest for the future rather than protect
"The recovery of the property market has certainly had a major positive
impact on consumer sentiment. People are starting to spend where perhaps they
would have saved a year or two ago.
"For the economic recovery to gain momentum, we still need to see more
appetite from the banks to lend to slightly higher risk firms.
"Nobody wants to return to the days of lax criteria but there needs to be
more realism around business lending. Many perfectly viable and financially
strong SMEs are still unable to secure the finance they need to grow.
"While the economy may be back on song, many banks are still tone deaf to
the unique demands of many companies."
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