UK economy growing at fastest pace since 2007

The UK economy grew by 0.7 per cent during the final three months of last year, the Office for National Statistics (ONS) said today.

Although the quarter-on-quarter growth was slower than the 0.8 per cent expansion seen in the previous three months, the rate of growth for the year as a whole was 1.9 per cent – its best performance since 2007.

Chancellor George Osborne said the numbers were a “boost for the economic security of hardworking people”, and the manufacturing sector was enjoying the fastest growth amid a “broadly based” recovery.

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He added: “But the job is not done, and it is clear that the biggest risk now to the recovery would be abandoning the plan that’s delivering jobs and a brighter economic future.”

Today’s first estimate of growth for the fourth quarter shows the construction sector shrank by 0.3 per cent, despite support from UK government stimulus packages such as the Help to Buy scheme, which offers assistance to homebuyers with a deposit of as little as 5 per cent.

Construction remains 11.2 per cent below the pre-recession level in the first quarter of 2008.

Manufacturing improved by 0.9 per cent in the fourth quarter and is 8.2 per cent off pre-crisis levels.

The services sector, which represent three quarters of UK economic output, improved by 0.8 per cent.

Chris Williamson, chief economist at Markit, said: “There seems every reason to believe that robust growth will be sustained into 2014, not least because of the promise of ongoing ultra-loose monetary policy stance from the Bank of England and additional stimulus such as the Funding for Lending and Help to Buy schemes.”