Figures released today show that UK economic output rose by 0.8% between July and September
The Office for National Statistics (ONS), who released the figures, said that there had been “fairly strong” performance across all sectors. This figure builds on a 0.7% rise in GDP in April to June, and is the best quarterly performance since 2010.
The news prompted a tweet from the chancellor George Osborne, who posted on the social networking site that “Britain's hard work is paying off & the country is on the path to prosperity”. Deputy Prime Minister Nick Clegg also commented, saying that the UK is “firmly on the road to economic recovery”.
The ONS figures for the construction industry were up 2.5% over the quarter; this is the second successive quarter of growth after a volatile past year. It is believed that Help to Buy - the new scheme offering government-backed mortgages to first time buyers with smaller deposits - has played a part in the growth in this sector.
Overall figures show that production has grown by 0.5% - however this remains 12.8% short of its 2008 level. The services sector, which accounts for three quarters of the UK’s economic output, grew by 0.7%.
This is the first estimate, and could be revised up or down in the coming months.
George Osborne commented on the figures, saying:
“It shows that we are on the path to prosperity. Lots of risks remain, so we have to stick with the economic plan that has got us this far.
“What's encouraging about these figures is that it's not just services that are growing. Construction is growing and manufacturing is growing.”
His opposite number in the shadow cabinet, Ed Balls, was less optimistic:
“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.”
Some economists remain cautious. Chief economist at the Institute of Directors, Graeme Leach, said:
“The outlook looks better than at any time since the onset of the financial crisis. Indeed, our members have more confidence in the economy than at any time since 2008.
“However, strong headwinds remain and the annual growth rate year on year is nothing to get too excited about yet. Though inflationary pressures are likely to remain benign, debt and inflation are rising faster than earnings.”