UK economy grows by 0.6 percent

The second quarter of 2013 brought about some very good news for the UK economy, since the Office for National Statistics (ONS) reported today that gross domestic product expanded by 0.6 per cent in the three months to June, double the rate of the previous quarter.

The most important contributor to the improved growth levels was the services sector, which makes up around thee quarters of the entire economy. The sector expanded by the 0.6 percent, which is the same level of growth recorded by the industrial production sector as well. The construction sector recorded a steeper growth, though, at 0.9 percent.

Nevertheless, it’s not all good news, at least not yet. That’s because, despite last quarter’s growth, the UK’s output is still 3.3 per cent below its peak in early 2008, just before the recession began.

The Chancellor, George Osborne, also hailed the figures, which were better than the 0.2 per cent projected by his official forecaster, the Office for Budget Responsibility. “Britain is holding its nerve, we are sticking to our plan, and the British economy is on the mend,” he said.

Nevertheless, it’s not all good news, at least not yet. That’s because, despite last quarter’s growth, the UK’s output is still 3.3 per cent below its peak in early 2008, just before the recession began.

Furthermore, another range of current problems, such as the fall in real pay, limited banking lending and a higher level of austerity in the public sector might prevent the UK economy from keeping up its sustained growth in the second half of the year.