UK GDP Rises By 0.8 Percent

New Figures Released By The ONS Show UK GDP Rose By 0.8% In Q3

25.10.2013

David Shirt, Press Officer | 0161 838 3094

UK gross domestic product (GDP) output rose by 0.8 per cent in the third quarter (Q3) of 2013, according to the Office for National Statistics (ONS).

Analysts at the agency said there had been a strong performance across the board and this estimation, which will be confirmed with an adjustment in the coming months, was better than most analysts had expected, according to the BBC.

The Bank of England predicted a growth of 0.7 per cent but this was eclipsed by 0.1 per cent due to stronger than expected returns from the construction sector.

Output in all four main industrial groupings in the economy showed growth, with agriculture (1.4 per cent), construction (2.5 per cent) and services (0.7 per cent) particularly strong.

Manufacturing and production achieved a more modest 0.5 per cent rise, although strong order book figures indicate that this may improve in Q4 2013 and Q1 2014.

But as ever, this will depend on the weather and the ONS has warned in the past that cold snaps can have a massive effect on the economy, with the agricultural and construction sectors particularly hard-hit by this phenomenon.

These figures are particularly strong in comparison to Q3 2012 and GDP is 1.5 per cent higher now than it was during the Olympics and Paralympics, even though analysts argue these two events boosted output.

One of the main drivers of construction growth was the government's Help to Buy scheme, which has driven home builders like Redrow and Persimmon to build more properties as demand increases.

Ed Balls, Labour's shadow chancellor, welcomed the GDP figures, but said: "Working people are on average over £1,500 a year worse off since David Cameron came to office, yet very high earners have enjoyed a huge tax cut.

"And on the cost of living, growth and the deficit, this government have failed every test they set themselves in 2010."

Expert Opinion
These figures are very welcome and confirm that all the positive sentiments that we have been hearing about the economy are being translated into actual output.

“It is vital that the economy now builds some momentum and continues to develop across all sectors. Manufacturing output did not increase as much as other areas of the economy, but in order for growth in the UK to be sustainable, it is vital that more is done to reduce unnecessary red tape whilst making finance easier to access.

“Small and medium-sized enterprises have certainly played their part. They are the backbone of the UK economy and it is vital that the Government listens to their needs and does all it can to support them in the future and encourage their entrepreneurial spirit.

“As leading legal advisers to small and medium-sized businesses, we recognise that these businesses need high quality and affordable legal advice. Enabling a business to deal quickly and effectively with day-to-day issues that affect them, quite simply means that they can focus on expansion and job creation.”
Steven Beahan, Partner