With the UK’s economic recovery strengthening in the second quarter of 2014, official data is showing that business investment has surpassed the peak levels it reached before the crisis, whilst household disposable income is outpacing inflation.
British growth is becoming stronger amidst a balanced and sustainable recovering environment, the data released on Tuesday revealed.
Chancellor George Osborne tweeted on Friday: “Good economic news today. GDP in Q2 revised up to 0.9%; biz investment up 11%. More evidence that tackling our problems head on works.”
Revised growth projections show that the UK economy grew by 0.9 per cent in the three months from April to the end of June, 0.1 per cent higher than the previously made estimations of 0.8 per cent. This is the strongest quarterly growth the country has witnessed since mid 2010, according to figures from the Office for National Statistics (ONS).
Annually, business investment increased by 11 per cent in the second quarter of this year, representing the largest annual increase since the first quarter of 2007. Consumer spending, the source of power for two thirds of the Uk economy witnessed a growth of 0.6 per cent, representing growth for the twelfth quarter in succession.
You can find the complete data from the report at:
The data, which brings Britain back in line with European Union accounting standards, confirmed suspicions that the UK exited the recession in the third quarter of 2013, and not as had been thought, the second quarter of this year. Output is now sitting at 2.7 per cent above the pre-crash peak, compared to previous figures of around 0.2 per cent.
The recovery from the so called “Great Recession” was a close match for the economic downturns of the late 1970s until 2011, a period during which UK recovery lost significant pace.
In that year, the EU enforced losses on Greek bondholders resulting in a massive “confidence shock”, according to Christian Schulz of German bank Berenberg. “Ultimately the UK economy is a part of the European economy, and was dragged down by weaker sentiment from within the union.”
John Hawksworth, chief economist at Pricewaterhousecoopers said that the revised data “now makes the United Kingdom look more like Germany and less like France.”
ESA10, the official name for the The European accounting standards now also requires countries to estimate the contribution to the economy from the illegal sex and drugs industries in recent years.
The data from the ONS shows that illegal drugs and prostitution contributed approximately £11 billion to the UK’s gross domestic product (GDP) in the 7 years from 1997 to 2013.
The illegal drugs industry is said to add around £6.7 billion per year in current prices, whilst prostitution is believed to be worth £4.3 billion a year to UK growth.