GDP Figures Expected To Show Strong UK Growth
Economists predict that data from the Office for National Statistics will show a fourth consecutive quarter of gross domestic product (GDP) growth in 2013.
The rate of economic expansion may be shown to have slowed to 0.7% from 0.8% the previous quarter – but that would still mean overall growth of 1.9% in 2013, up from 0.3% the previous year.
That figure would amount to the fastest growth since 3.4% in 2007 – before the worldwide economy went into meltdown.
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The GDP update is expected to give a boost to Chancellor George Osborne – just a year after the UK was gripped by fears of a “triple dip” recession.
It comes after the International Monetary Fund set aside its warnings about Britain “playing with fire” with its austerity policies and again upgraded its forecast for UK growth.
GDP growth of 0.5% in the first quarter of 2013 was followed by 0.8% in the second and third quarters of the year.
Some experts believe the latest figures will come in just under the 0.9% forecast by the Bank of England for the fourth quarter.
A good Christmas for retailers is not predicted to boost growth by much as the festive 2.6% sales increase came after a weak October and November.
The manufacturing sector slowed in November, while construction slumped by 4%, despite Government schemes such as Help to Buy.
Labour’s shadow chancellor Ed Balls said claims that the UK economy is surging ahead are “cloud cuckoo land”.
He told BBC2’s Newsnight that three years of economic “flatlining” on Mr Osborne’s watch had left the UK lagging behing France, which has recovered to its pre-crisis peak.
He said: “Do you really think up and down the country at the moment when most people are seeing their living standards fall and in most parts of the country there isn’t new business investment coming through, do you think that is an economy that is doing really, really well? That is cloud cuckoo land.”
The IMF predicts the UK economy will grow by 2.4% in 2014 – matching the independent Office for Budget Responsibility’s forecast.
The Bank of England most recently estimated 2014 growth at 2.8%.
Investec economist Philip Shaw expects a 0.7% GDP growth figure for the fourth quarter of 2013, but said this should not be seen as a disappointment even though it would be a slight slowing from the third quarter.
He said: “There is no evidence whatsoever that the recovery is petering out.”
He said a slightly lower figure could ease fears that policymakers may be persuaded to lift interest rates this year.
Experts at Capital Economics and Scotiabank both predicted growth of 0.8%.