The Office for National Statistics (ONS) has this morning reported the UK economy has grown by 0.7% in the fourth quarter of 2013 with total GDP for the year growing by 1.9%.
These are the best annual growth figures since 2007 (recorded at 3.4%) although we are still 1.3% behind the peak GDP figure in Q1 2008. We are therefore still recovering from the deepest recession in history in which GDP decreased by 7.2%.
The contribution an industry sector makes to GDP quarterly growth is dependent on its weighting to the economy with services contributing 77.8%, production 15.2%, construction 6.3% and agriculture
Construction output decreased by 0.3% in Q4 2013, following an increase of 2.6% in the previous quarter. Between Q4 2012 and Q4 2013, construction output increased by 4.5%. Growth figures in the construction industry although not greatly affecting the overall economy are a positive signal considering it is the lack of housing supply that is driving the price boom in London and parts of the South East.
The Office for Budget Responsibility recently revised its 2013 UK growth forecast from 0.6% to 1.4% and is currently forecasting growth of 2.4% for 2014, but if the economy continues recovering at its current pace this may yet have to be revised again.
The International Monetary Fund has also increased its growth forecast for the UK economy from 1.9% to 2.4% making us the fastest growing economy in Europe.
With GDP now nearly hitting the Bank of England target of 2% growth and inflation matching its target of 2% the recovery is within forecast plans, but still fragile due to foreign economic uncertainty. Mark Carney The Governor of the BofE has confirmed there is no pressure to increase interest rates above their current level.
I deliberately used the title Good News as I have already seen headlines by the press scaremongering without evidence over interest rates.