Economic recovery continues with fourth quarter growth
- Published on Tuesday, 28 January 2014 10:20
- Written by Daniel Mason
The UK economy grew by 0.7 per cent in the fourth quarter of 2013, according to a first estimate published by the Office for National Statistics today.
It means the economy expanded in all four quarters of last year and brought the annual growth rate to 1.9 per cent, the fastest since 2007.
The news comes on the back of a sharp drop in unemployment announced last week, with the jobless rate falling to 7.1 per cent, and follows the International Monetary Fund’s decision to upgrade its forecast for the UK economy.
Joe Grice, chief economic adviser at the ONS, said that the four successive quarters of “significant growth” in 2013 were indicative that the economy was “improving more consistently” than previously.
He added that four-fifths of the fall in GDP during the recession had now been recovered, though that still leaves the economy 1.3 per cent below its pre-downturn peak.
The latest figures show that between October and December last year, there was growth in three of the four main economic sectors – agriculture, production and services – but a decline in output in construction.
Chancellor George Osborne, in a tweet, welcomed the "broadly based" growth and claimed that the "biggest risk to the recovery" would be to abandon the government's economic plan.
Danny Alexander, the Liberal Democrat chief secretary to the treasury, said: “These figures are further evidence that the recovery is becoming established. 2013 was the first year since 2007 to see economic growth in all four quarters.”
He said the coalition government’s economic plan was “delivering jobs, growth and the right climate for investment".
However, the 0.7 per cent growth in the last quarter of 2013 was down slightly on the 0.8 per cent seen in the previous three months, while annual growth of 1.9 per cent remains a long way off 2007’s rate of 3.4 per cent.
Labour's shadow chancellor Ed Balls said it was "still no recovery at all" for people facing a "cost of living crisis".
"Wages are now down £1,600 a year after inflation under David Cameron and tax and benefit changes since 2010 have left families worse off by an average of £891 this year.
"And with business investment still weak, construction output down and housing demand outstripping housing supply, this is not yet a recovery that is built to last."
Len McCluskey, general secretary of the trade union Unite, warned that "for many, the recovery is passing them by" because the "benefits of growth are being funneled into the pockets of the wealthy".
"There are now more people in poverty, who are working, than out of work," he said.
"London and the south east are powering growth, sucking in people from the regions and investment from abroad. We can't have a recovery based just on soaring house process and consumer spending."
Professor Philip Booth, editorial director at the Institute of Economic Affairs think tank, said the recovery compared very "unfavourably with the recovery from the Great Depression and post-war recessions".
"It is welcome news that the economy is growing steadily, but the economy is smaller than in 2008 and living standards are still falling as productivity stagnates."