After several false starts, the UK economy finally appears to be getting back on its feet - EY ITEM Club
25 July 2013
- There is underlying momentum in the UK economy
- Services are still doing the heavy weight-lifting but other sectors are beginning to contribute positively as well
- The UK economy finally appears to be on a sustained path of growth but there is still a long way to go
Nida Ali, economic advisor to the EY ITEM Club comments on today’s GDP figures:
“The headline figures were bang in line with expectations, driven by private sector expansion, signalling underlying momentum in the economy. This is very encouraging and qualifies as the right kind of growth that we have been lacking over the past couple of years.
“While strong growth in services was expected, the 0.4% increase in manufacturing output came as an upside surprise given the weak data for April and May. However, the construction figures were slightly disappointing, as monthly data had indicated a stronger expansion.
“After several false starts over the past eighteen months, the economy finally appears to be getting back on its feet. And we are well on track to achieving growth of more than 1% this year. Although the consumer sector will probably play a major role in the recovery, we also expect momentum to build in business investment and exports, which should give way to stronger growth of over 2% in 2014. But with a number of weak areas in the economy, such as high youth unemployment, disappointing wage growth and low productivity, we still have a long way to go.”
Mark Gregory, EY’s chief economist added:
“The strengthening of the economy provides a unique opportunity for the UK to improve its global position. With confidence on the increase; growing activity in the USA which is a key key trading partner; a significant change in the relative strength of some emerging markets and weakness of our competitors; the UK should seize the moment. This requires a coordinated strategic response from Government and business to incentivise accelerated investment.”