Economy surpasses pre-crisis level
Previously GDP, known as the main indicator of economy, peaked in Q1 2008, yet this was surpassed by 0.2% in Q2 2014.
Such has been the economy’s resurgence, GDP was 3.1% higher in the second quarter of 2014 year-on-year.
Back in 2009 the economy plummeted by 7.2% from the pre-crisis peak.
Chris Williams, CEO of Wealth Horizon, said: “The latest GDP growth figures are encouraging and suggest both the recovery and the economy now seem to be more sustainable.
“However, for the majority of the population, real living standards still fall short of their pre-crisis levels. Families are still working hard to repair personal balance sheets and young and old have been affected by high living costs and low interest rates on savings.
“Now could be a good time to reflect on the progress that has been made on a personal and economic level. Key to this will be not to get carried away and to continue the new ethos of saving over spending.”
Yesterday the International Monetary Fund predicted Britain’s economy to grow by 3.2% by the end of the year, almost double the rate of the US.
Previously the body forecast GDP growth of 2.9%, but such has been the strength of the recovery it felt forced to revise the prediction.
Chancellor George Osborne said: “The IMF has upgraded their 2014 forecast for the UK by more than any other major economy.
“The government’s long-term economic plan is working.
“But the job is not yet done and so we will go on making the assessment of what needs to be done to secure a brighter economic future.”
Breaking the ONS figures down, output increased by 1.0% in services and 0.4% in production, although it declined by 0.5% in construction and 0.2% in agriculture.
Gary Cooke, senior dealer at the forex specialists FEXCO, added: “Bang on prediction growth, and an economy that has surpassed its pre-crash peak – the headlines will reassure and rally Sterling in equal measure.
“After some insipid retail sales figures and the Bank of England’s MPC minutes revealed Britain’s ratesetters to be less hawkish than thought, the Pound slipped to a four-week low against the Dollar on Thursday.
“But Friday’s strong if unsurprising GDP numbers will ensure the Pound ends the week with a bang not a whimper.
“With Britain’s strong growth leaving most of the Eurozone in the dust, Sterling will continue to outpace the Euro – which this week touched a 23-month low against the Pound.
“But a closer look at the numbers reveal the UK economy is returning to type. As the manufacturing and construction sectors shrink, services now account for almost 80% of the British economy.
“With the hoped-for interest rate rise still some time off and inflation outstripping wage rises, awkward questions remain about the quality of the recovery.
“So Sterling’s rally against Dollar is likely to be more modest, and there is no guarantee it’ll breach the $1.70 mark seen earlier this week.”