growthOn 28 January 2014, the Office for National Statistics (ONS) published a preliminary estimate for Gross Domestic Product (GDP) containing constant price Gross Value Added (GVA) data for the UK. Change in GDP is the main indicator of economic growth.

The good news is that the British economy expanded by 1.9% in 2013 – the fastest GDP growth in a calendar year since 2007. However the UK economy is still 1.3% smaller than before the financial crisis began.

Key points

  • Change in gross domestic product (GDP) is the main indicator of economic growth. GDP increased by 0.7% in Q4 2013 compared with Q3 2013.
  • Output increased in three of the four main industrial groupings within the economy in Q4 2013 compared with Q3 2013. Output increased by 0.5% in agriculture, 0.7% in production and 0.8% in services. However, output decreased by 0.3% in construction.
  • In Q4 2013 GDP was estimated to be 1.3% below the peak in Q1 2008. From peak to trough in 2009, the economy shrank by 7.2%.
  • GDP was 2.8% higher in Q4 2013 compared with the same quarter a year ago. GDP is estimated to have increased by 1.9% in 2013, compared with 2012.

And yesterday, Markit Economics published the latest Markit Household Finance Index™ (HFI™) – United Kingdom.  It shows that gloom lifts over household finances amid lowest job concerns for at least five years and falling inflation perceptions.  The Household Finance Index (HFI) hit the joint-highest level since the survey began in February 2009 whilst people’s inflation perceptions dropped to the lowest level for three-and-a-half years. And on the job front, people’s worries over job security are at a record low although income from employment rises only slightly. The Markit report is here.

And finally, the CBI Growth Indicator published today reveals the fastest pace of growth in economic output since 2007 with the outlook for the next quarter buoyant. That is according to a new CBI Growth Indicator launched. The CBI Growth Indicator is a new monthly composite of the leading business organisation’s economic surveys spanning manufacturing, retail and the services sector. It offers an early perspective on economic growth and covers close to 75% of the private sector economy. Almost a third more firms told the CBI that output was rising than falling in the quarter ending this month, up from 26 per cent in December. As recently as April, the balance was still negative, reflecting the rapid turnaround in the UK. Read the CBI statement here.

Martin Pollins
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