Economy grows but is still smaller than peak in 2008

 
Tim Wallace
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EVERY sector of the British economy recorded growth in the second quarter of the year, but the economy still has a long way to go before it reaches its 2008 peak, official figures showed yesterday.

GDP increased by 0.6 per cent in the three-month period, and is 1.4 per cent bigger than it was a year earlier.

But that still leaves output 3.3 per cent below the peak it reached prior to the financial crisis, a worse performance than that of peers like the US, France and Germany.

Of the G7 economies, only Italy has performed worse since the financial crisis struck.

The dominant services sector expanded by 0.6 per cent in the three-month period and grew by 1.3 per cent on the year.

All services industries recorded growth, with business services and finance output expanding by 0.5 per cent in the quarter, rebounding from a 0.1 per cent fall in the previous three-month period.

Despite political rhetoric over spending cuts, the government services component of GDP also expanded 0.1 per cent in the quarter and 1.6 per cent on the year.

Manufacturing output grew by 0.4 per cent in the quarter but remains 0.9 per cent below its level in the same period of 2012.

And construction recorded growth of 0.9 per cent in the three-month period, making up some of the ground lost in the 1.7 per cent contraction in the previous quarter and leaving the sector down one per cent on the year.

“Britain is holding its nerve, we are sticking to our plan, and the British economy is on the mend – but there is still a long way to go and I know things are still tough for families,” said chancellor George Osborne.

“Unlike the unbalanced economy before the crisis, we are going to make sure that everyone benefits from this recovery.”