BUSINESS LEADERS yesterday called for “greater efforts” to help rebalance the UK economy despite news it had put in its best performance in more than six years.
Official figures confirmed an initial estimate of quarter-on-quarter growth in gross domestic product (GDP) at 0.8 per cent.
But growth compared to the second quarter a year ago was revised up to 3.2 per cent, compared with a previous estimate of 3.1 per cent – the highest level since the end of 2007 when the figure was 3.7 per cent.
The Office for National Statistics (ONS) said the upward revision of the yearly growth rate was due to a stronger performance by the construction sector than initially assumed.
The data reiterated that the UK had finally climbed out of its longest downturn since the Second World War, with GDP surpassing its 2008 pre-recession peak by 0.2 per cent.
It contrasts with the dismal picture in the eurozone, where growth ground to a halt over the second quarter amid a flat performance from France and contraction in Germany.
The Bank of England revised upwards its forecast for UK GDP growth this year from 3.4 per cent to 3.5 per cent this week.
Britain is expected to record the strongest 2014 expansion of the major global economies. However, prospects for an interest rate rise have been dampened by stagnant wages.
The British Chambers of Commerce, which represent thousands of businesses, said the latest ONS figures provided “further evidence that the UK recovery remains on course”.
But the organisation’s chief economist, David Kern, added: “While the strength of the recovery, coupled with the positive job figures should underpin business confidence, further efforts must be made to rebalance the econ-omy towards exports.
“Recent figures showing stagnant growth in the eurozone will add to the challenges facing our exporters and reinforces the need to diversify our trade into new, dynamic markets outside of Europe.”
Chris Williamson, chief economist at financial information specialist Markit, said: “With interest rates tied to wages growth, and the official measure of pay unlikely to pick up in coming months, the first rise in interest rates is widely expected to be delayed until next year.
“In the meantime, UK exporters could benefit from a pick-up in the global economy. The US in particular has returned to growth after the extreme weather hit the country in the first quarter, helping boost global economic growth to the fastest for almost three-and-a-half years in July.”
The ONS did not provide a breakdown of the spending which drove economic growth as it normally does when it issues its second reading of GDP. It is changing its methodology for calculating GDP and will provide those details at the end of next month.
A Treasury spokesman said: “Today’s figures confirm that our economy has recovered all of the output lost in the great recession, and is now bigger than its previous peak in the first quarter of 2008.
“The government’s long-term economic plan is working, with the econ-omy growing at its fastest annual rate in six years.”