Economy expands at fastest pace in three years

The UK economy grew by 0.8 per cent during the third quarter of 2013, the fastest pace in three years, the Office for National Statistics (ONS) said today.

The expansion, which follows growth of 0.7 per cent in the previous three-month period, was driven by the dominant services sector, where the ONS said output was now slightly higher than its pre-recession peak of early 2008.

Economists described the figures as a “shot in the arm” for Chancellor George Osborne, who said: “This shows that Britain’s hard work is paying off and the country is on the path to prosperity.”

Shadow chancellor Ed Balls said: “After three damaging years of flatlining, it’s both welcome and long overdue that our economy is growing again.

“But for millions of people across the country still seeing prices rising faster than their wages, this is no recovery at all.”

Howard Archer, chief UK and European economist at IHS Global Insight, predicted that GDP growth would ease back to 0.6 per cent in the fourth quarter, and settle into a range of 0.5 to 0.6 per cent during 2014.

He added: “As a result, we forecast GDP growth to come in at 1.4 per cent overall in 2013, rising to 2.4 per cent in 2014.”