Figures will show economic fightback gathering pace

St Helens Star: The figures should provide the latest boost for Chancellor George Osborne after the International Monetary Fund again upgraded its forecast for growth in Britain The figures should provide the latest boost for Chancellor George Osborne after the International Monetary Fund again upgraded its forecast for growth in Britain

The extent of Britain's economic fightback over the last year will be underlined today when official figures are expected to show the best annual pace of growth since 2007.

Economists expect that data from the Office for National Statistics will have shown a fourth consecutive quarter of gross domestic product (GDP) expansion though this may have slowed to 0.7% after notching up 0.8% in the previous period.

Even so, it should mean overall growth of 1.9% for 2013 following a limp increase of just 0.3% for the whole of the previous year. The economy grew by 3.4% in 2007.

It demonstrates the scale of the improvements in the UK's economic prospects - one year after it was feared that the country was about to sink into an unprecedented "triple dip" recession.

The figures should provide the latest boost for Chancellor George Osborne after the International Monetary Fund again upgraded its forecast for growth in Britain.

Just months ago the IMF had told the Government to rethink its austerity strategy and the body's chief economist warned Mr Osborne he was "playing with fire".

But growth of 0.5% in the first quarter of 2013 was followed by 0.8% in the second and 0.8% in the third.

The Bank of England has forecast 0.9% growth for the fourth quarter but economic data published since then have prompted some experts to expect a slightly lower rate.

A bumper Christmas that saw retail sales shatter expectations by climbing 2.6% in December will not have helped boost overall figures too much after a slow performance from the sector in October and November.

Meanwhile latest official figures from the construction industry showed it was likely to drag on GDP, after succumbing to a 4% slump in November, despite being buoyed by Government policies such as Help to Buy Policymakers hope for a rebalancing of the economy away from a reliance on consumer spending. But the manufacturing sector came to a standstill in November while the monthly trade deficit was stubbornly high at more than £3 billion.

The services sector, which represents three quarters of output, posted just 0.1% growth in October according to the latest official data though other surveys suggest it has been growing strongly in the intervening period.

Investec economist Philip Shaw expects a 0.7% GDP growth figure for the fourth quarter of 2013, but said this should not be seen as a disappointment even though it would be a slight slowing from the third quarter.

"There is no evidence whatsoever that the recovery is petering out," he said.

However, a slight softening in the figure could ease fears that policymakers may be persuaded to lift interest rates this year, he added.

Alan Clarke, of Scotiabank. said the dive in construction data was bound to drag on GDP but other strongly positive indicators suggested a better performance, predicting 0.8% growth. Experts at Capital Economics predicted the same figure.

For this year, the IMF forecasts growth of 2.4%, in line with the independent Office for Budget Responsibility. The Bank of England's most recent outlook was for growth of 2.8% in 2014.

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