THE BRITISH economy is back within touching distance of its pre-recession record size, as official figures yesterday confirmed a 0.8 per cent expansion at the start of 2014, driven by manufacturing and services.
It came as figures from Nielsen showed UK job confidence hit its highest level in six and a half years.
The economic rise is faster than the 0.7 per cent growth seen in the fourth quarter last year, and was described as “solid rather than spectacular” by Jonathan Loynes of Capital Economics.
It means that the economy has grown by 3.1 per cent in comparison to the same period in 2013.
Production from industry and manufacturing rose by 0.8 per cent, faster than during 2013, and the contribution from services also rose, with a 0.9 per cent expansion. In comparison, construction growth was weak, with a 0.3 per cent expansion that many analysts attributed to flooding and poor weather during the winter.
This means that the economy only needs to grow by 0.6 per cent in the second quarter to push GDP back above its previous peak, reached in 2008 as the financial crisis hit.
However, the growth has been paired with a significant rise in population over the last six years: GDP per person in the UK still has a long way to go before it returns to previous record levels.
The number of hours worked in the economy is already back above the 2008 level, higher by almost two per cent at 966.8m hours. The figure rose by 0.4 per cent between December and the end of the first quarter
“We expect the UK recovery to continue at least at this pace as rising real incomes support household spending and low interest rates paired with strong confidence boost investment.
“Exports should benefit from the return to growth in developed markets, but may still be outgrown by imports due to strong domestic demand,” said Berenberg’s Robert Wood.