UK GDP Is Now Higher Than In 2008, Study Finds

The UK has finally seen its output exceed the previous peak of 2008, just before the recession struck.

For the intervening six years the economy has mostly either been in decline - losing 7.2 per cent of gross domestic product between 2008 and 2009 - or fluctuated between low growth and slight shrinkage.

However, 2013 saw a return to substantial growth and the economy is now surging ahead, with the latest unofficial data from the National Institute of Economic and Social Research (NIESR) suggesting gross domestic product (GDP) rose by 0.9 per cent in the three months to May.

The NIESR uses the term 'depression' to denote the period in which an economy is below its previous peak - whether currently in recession or not - and on this definition the depression is now over, with output 0.2 per cent up on the 2008 peak.

While the three-month growth figure is slightly down from April's 1.1 per cent, the continued upward trend will be welcomed by SMEs as they seek to grow and consider expanding their workforces.

The NIESR predicted last month that the UK economy will grow by 2.9 per cent this year and 2.4 per cent in 2015. This is in line with other projections for growth, which allow for factors such as rising interest rates to cool the economy down.

It is not just the NIESR that paints a positive picture of the economy, with surveys and predictions all indicating a rapidly improving outlook.

The Confederation of British Industry's (CBI's) Growth Indicator for May was a case in point, with the month displaying a record increase in production. A positive balance of 35 per cent of firms polled said activity was on the rise, ten per cent up on April's figure.

CBI deputy director-general Katja Hall commented:"The UK economy is performing strongly and this is thanks to rising business and consumer confidence, better credit conditions at home and improving global economic conditions.

"What's encouraging is that growth is becoming more broad-based, with solid increases in business investment over the past year. This bodes well for the year ahead."

Expert Opinion

Barely a day goes by now without research pointing to rising confidence among businesses and consumers, with the ultimate outcome being that the economy is improving. <br/> <br/>"Small businesses stand to benefit from this more than most, as many will see a growing number of opportunities arising as a result of the improvements being seen. This in turn may lead to opportunities for growing companies to enjoy both investment and also consider growing their workforce. <br/> <br/>"Amidst all of the positivity, it is important for SMEs to consider the support network they have around them. Legal advice is particularly important and could play a key role in ensuring businesses are able to thrive and prosper in the right manner while meeting their regulatory responsibilities." Steven Beahan - Partner