New ONS Figures Show That The UK's Economy Grew By 0.8% In The First Quarter Of 2014

The Office for National Statistics (ONS) has released figures that show the UK economy grew by 0.8 per cent in the first quarter of 2014.

It is now the fifth consecutive period of successive growth, meaning the UK is seeing the longest period of prosperity since the start of the financial crisis in 2008.

Gross domestic product (GDP) output grew in all major sectors of the economy apart from agriculture, which experienced a small downturn that has been partially blamed on the poor weather seen in the south-west of England that led to the Somerset Levels to be almost completely flooded.

Analysts had mixed views before the announcement, with some expecting growth of 0.9 per cent, while others were more muted and thought the flooding could lead to a smaller 0.5 per cent upturn.

Chancellor George Osborne welcomed the news, stating: "The impact of the Great Recession is still being felt, but the foundations for a broad based recovery are now in place. The biggest risk to economic security would be abandoning the plan that is laying those foundations."

However, shadow chancellor Ed Balls said that the economy was imbalanced and favoured higher earners over those without a large capital base to rely on.

"Under this government, wages after inflation are down by over £1,600 a year. On top of this, tax and benefit changes will leave families almost £1,000 a year worse off by the time of the next election," he explained.

However, despite political disputes over the state of the economy, analysts have welcomed the news of growth.

Speaking to the Daily Telegraph, Scott Corfe, an economist at the Centre for Economics and Business, said the economy is likely stronger than the ONS report shows, as the construction sector was performing exceptionally well and this normally precedes a boost in GDP.

However, some challenges remain on the horizon, including the potential for a civil war in Ukraine, which would destabilise European export markets.

Russia's threat to withhold gas exports would also have a negative effect on a number of the UK's neighbours, including Germany and Italy.

Expert Opinion

This is very positive news and yet another indicator that the economic woes of recent years may well be behind us. Small businesses will take much heart from this, with these figures highlighting that opportunities are likely to begin to arise which they will be able to take advantage of. <br/> <br/>"In turn, this may encourage many growing businesses to assess their current status and consider developing their operations either through expanding their workforce or looking at opportunities further afield from the UK. We would urge any small companies with ambitions to ensure they speak to legal advisors to ensure that they are fully prepared to head to the next step." Fergal Dowling - Partner