EXPERTS have forecast a “brighter future” for Britain’s economy, as new data revealed better-than-expected growth in the second quarter of this year.
The Treasury said the UK was moving “from rescue to recovery”, as figures showed a 0.7 per cent rise in Gross Domestic Product (GDP) between April and June, compared with the previous three months – driven by solid export growth and increased consumer spending. Compared with a year ago, the figure was 1.5 per cent higher.
The revised data, issued by the Office for National Statistics (ONS) yesterday, beat the government’s initial estimate and economists’ forecasts, and puts Britain’s growth rate on a par with EU powerhouse Germany.
Economists welcomed the news, but warned that the government needed to ensure business could take advantage of the green shoots of recovery to sustain the economic improvement.
“Today’s positive revision further points to a brighter forecast for the UK as the signs of recovery continue to gather pace,” said Phil Orford, chief executive at the Forum of Private Business.
“It’s positive news – an increase of 0.7 per cent is encouraging but this is no time for complacency.”
A spokeswoman for the Treasury said: “The government is taking tough decisions to deal with the deficit. Today’s data shows that borrowing fell last year.
“And while we can and will take nothing for granted, the economy is moving from rescue to recovery. The economy is growing, the deficit and unemployment are falling.”
The ONS revised second quarter growth up from its initial estimate of 0.6 per cent, boosted by higher output across construction, manufacturing and parts of services. The first GDP estimate, published in late July, was based on 44 per cent of data, while the latest estimate is based on 88 per cent.
Economists said the recovery was looking more “durable” as output was helped by a 3.6 per cent increase in exports and rising business investment.
Consumer spending was also in positive territory, rising by 0.4 per cent in real terms over the quarter, boosted by pay and pension contributions growing by 2.4 per cent. That was highest quarterly pay increase since late 2000, driven by unusually high bonus payments in April.
The economy has been showing signs of improvement since the start of the year, when revised figures for the first quarter showed that Britain had avoided a double-dip recession.
A raft of positive economic data in recent weeks, including a rise in housing activity, manufacturing and car registration figures, and better retail sales figures, have all served to boost consumer confidence.