Stats show UK economy soaring to a record high
THE ECONOMY hit its pre-crisis peak far earlier than previously thought, according to official figures published yesterday.
British GDP surpassed its previous high midway through 2013, the Office for National Statistics (ONS) said – around a year earlier than its unrevised data had shown.
Current GDP is 2.7 per cent above its 2008 peak. Meanwhile, the UK had the fastest annual growth of all G8 member nations in the year to June, with yesterday’s data confirming a 3.2 per cent year-on-year expansion in the British economy.
Growth from April to June was revised upward to 0.9 per cent after improvements in the construction, services and manufacturing sectors. However, earlier revisions offset this upward revision to leave the annual figure of 3.2 per cent unchanged.
The data released by the ONS reflected changes that were carried out to comply with new European GDP accounting rules. One significant difference is the inclusion of research and development spending in investment which helped to smooth out the boom-bust cycle.
The peak to trough fall is now considered to be six per cent, much lower than the previous 7.2 per cent. GDP per capita remains below prerecession levels, although by less than previously thought.
Included in the data was also the Index of Services which shows monthly movements in value added for the service industries – which account for around 78 per cent of GDP. July saw a year on year increase of 3.4 per cent which is consistent with the strong growth implied by other surveys.
“Overall, the new data suggest that UK GDP followed a similar path to total EU GDP between early 2008 and mid-2012, but has since shown much stronger growth as the UK decoupled from the Eurozone,” commented John Hawksworth, head of macroeconomics at PwC.