UK asserts position as one of fast-growing major economies as ONS announce first quarter growth of 0.8%
The UKís status as one of the rapidest-growing economies in the western world has been re-affirmed by official data that has illustrated a sharp rise in business investment, construction and manufacturing output during the first quarter of 2014.
The latest figures released by the Office for National Statistics (ONS) indicated that GDP had risen by 0.8% during the first three months of this year, which has resulted in the forecasted growth rate for 2014 soaring above 3%; substantially larger than the estimates given for other European giants and the USA.
Economists have welcomed the incredible 8.7%% rise in business investment in the year to March 2014, and have highlighted the figures as a clear sign that confidence levels are on the up amongst the countryís bigger companies, though it should be noted that consumer spending continues to drive the economic economy as the finances of the government diminished in the previous month.
Ian Stewart, chief economist at Deloitte, identified that the Office for National Statistics initial revision of GDP figures released last month illustrated that the recovery was appearing "better balanced and more sustainable, with business investment, manufacturing and construction outpacing growth in the wider economy".
Discussing other figures related to the service sector, the ONS said that the recent performance of business services, finance and distribution industries had all boosted the UKís economy, as the recovery begins to take a more balanced shape than it has in the past year.
A recent surge in the level of consumer spending on luxury purchases such as eating out at restaurants and spending nights in hotels has also bolstered the productivity of the service sector, which has laid the foundation for the economic recovery in the past two years whilst the construction and manufacturing industries took time to catch up.
The services index rose by 3.1% in the year to March 2014, the ONS identified, with all of the four primary components of the service sector rising during this period.
Growth also increased between the months of February and March, with official figures illustrating that output rose by 0.4% after a rise of only 0.2% between January and February.
The service industry was the first to recover from the impact of the recession and has upheld a consistent and stable growth rate in the past two years. However, the areas of the sector which have grown have changed as government spending has been scaled back in order to promote private sector expansion, the majority of which is driven by manufacturing and the booming property market.
Lee Hopley, chief economist at EEF, the manufacturers' organisation, has argued that elevating and optimising the performance of the export sector is vital to the long term stability and recovery of the UK economy.
"We have now seen five consecutive quarters of business investment growth which, while very encouraging, is still only part of the rebalancing story as net trade is still doing nothing for the overall growth picture.
"If, however, the very strong export indicators seen in recent business surveys are a sign of things to come, we should finally start to see some clear signs that rebalancing is under way in the coming quarters."
Official data also illustrated that the public sectorís net borrowing last month withstanding the temporary effects stood at £7.4 billion. Alarmingly, this was £1.7 billion more than it was in the same month back in 2013, and suggests that the Treasury are currently failing in their endeavour to reduce the countryís deficit by half by the end of 2014 from the value it reached at the height of the recession. However, they will be boosted by the news that the overall deficit is continuing on its downward trajectory, decreasing by a monumental £7.8 billon to £107.4 billion, down considerably from the £115.1 billion it stood at in April 2013.
The Treasury has argued that the figures clearly illustrate how successful the government has been at achieving a full spectrum recovery, and pointed out that both that the manufacturing and construction sectors are recovering at a faster rate than initially expected.
A Treasury spokesman added: "The deficit has fallen by a third and is forecast to have halved by the end of the year. But today's public sector finance figures remind us that we cannot take this for granted. And as the chancellor said at budget, we still need to export more.
"The biggest risk now to economic security would be abandoning the plan that is laying the foundations for a brighter economic future.