25 Jul 2013

UK ‘holding its nerve’ with 0.6 per cent growth

Chancellor George Osborne says Britain “is holding its nerve”, while the prime minister hails “encouraging” news, as GDP figures show 0.6 per cent growth in the second quarter of 2013.

It was the first time since 2011 that the UK has seen back-to-back quarterly increases, after a 0.3 per cent rise at the beginning of this year.

The Office for National Statistics figures show all the main sectors of the economy grew for the first time since the third quarter of 2010, adding to hopes for a recovery.

Chancellor George Osborne tweeted: “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.”

Prime Minister David Cameron said the figures were “encouraging” and showed the UK was on the “right track”.

He wrote on Twitter: “Today’s economic growth figures are encouraging. We are on the right track – building an economy for hardworking people.”

The prospects of the UK entering the sunlit uplands of recovery seem to have steadily increased since the previous GDP data in April this year, when the 0.3 per cent increase in the first quarter was announced.

Unofficial surveys published since then have suggested continued improvement, while revisions to ONS data revealed that the double-dip recession from 2011 to 2012 never happened.

Yet the revisions turned out to be double-edged, confirming that the initial recession following the financial crisis was far worse than first feared. It meant the economy was still 3.9 per cent below its pre-crisis peak – with the gap previously thought to be 2.6 per cent.

Doubts also remain about the strength of the recovery, with fears over risks posed by the turbulent eurozone and the consumer-led nature of the economy’s progress.