UK economy experiences fastest growth since 2007
Official figures from the Office of National Statistics were revealed earlier this month which show that the UK economy experienced its highest growth last year rate since 2007.
The economy grew by 2.6% in 2014 – the highest since 2007 and up from 1.7% in 2013. The third quarter of 2014 was of particular note, with the economy growing 0.7% – a sign for many that the troubles of the recession are thankfully becoming a distant memory. The last quarter of 2014 did see a marginal slow down to 0.5%, but opinion is mixed over whether the loss of momentum toward the end of the year might be merely a temporary blip or a more prolonged reason for concern. The ONS’s chief economist even commented on the surprising slowdown, saying it was far too early to say if it was an early sign of an incoming downward trend – gesturing that we should perhaps remain optimistic for the economy after a successful year of growth.
One potential reason we shouldn’t be concerned is that the 0.2% slowdown occurred in industries which already have a reputation for being erratic, such as mining, energy and construction. The services sector remains buoyant and dominant, which is a good sign for the UK’s economy.
There are alternative points of view of course. A chief investment officer at Close Brothers Asset Management said that the slow down in the fourth quarter of 2014 was a cause for concern and a clear cut sign that the economy is slowing. The election was cited as one of the biggest potential causes of the slowdown, causing uncertainty among key investors.
The figures from the ONS are only the first estimate of growth and could quite easily be revised and or amended as more data throughout the financial year becomes available. Experts at the Centre for Economics and Business Research said that they ‘wouldn’t be surprised at all’ if the ONS figures were revised, but remained confident that these revisions would paint a stronger picture of the UK’s economic
The construction data which dragged down the fourth-quarter figures were, they said, ‘surprising and at odds with other indicators and surveys’ which naturally presented a healthier picture.
These recent figures mean the UK was among the best-performing of the all the major economies in 2014. US growth figures are yet to be published, with the International Monetary Fund (IMF) currently estimating expansion of 2.4% for the year.