UK economy ‘firing on all cylinders’ as GDP hits 0.7%

Business-Growth-Drawing-Chart-Performance-700x450.jpg

UK GDP between the first and second quarter was 0.7 per cent, unrevised from the previous estimate last month.

Data from the Office for National Statistics shows that in volume terms GDP grew 0.7 per cent between the two quarters, while GDP per head increased by 0.5 per cent between Q1 and Q2 this year.

The rate is higher than the 0.4 per cent recorded in the first quarter of the year.

The biggest contribution to GDP growth was the service sector, followed by construction.

“It shows that as a nation we are feeling wealthier because we are happy to go out and spend. This will have been helped by the current low inflation in the UK: the cost of buying goods and services has not been increasing dramatically but our wages have,” says Alex Brandreth, senior fund manager at Brown Shipley.

GDP grew 2.6 per cent between Q2 this year and Q2 2014, while it grew 3 per cent in 2014, compared with 2013, unrevised from the previous estimate.

Ian Stewart, chief economist at Deloitte, says the data shows that Britain’s recovery picked up in the second quarter.

“In the UK, exports and business investment have perked up and consumer incomes have rebounded strongly. Despite recent turmoil in the Chinese financial markets the UK and US look set for decent growth through the rest of this year.”

Brandreth adds that UK GDP is “comfortably” ahead of pre-financial crisis levels.

“It took five years to recover from the financial crisis and today’s revised UK GDP figure doesn’t just demonstrate that we have recovered, but that the UK economy is firing on all cylinders again.”