The UK economy grew 0.8% in the first three months of 2014 – falling slightly short of expectations of 0.9%. As a result the pound fell in value against other major currencies, but economists pressed that the figure was still promising.
Schroders European Economist, Azad Zangana called it “a strong and promising start to 2014.
“Quarterly year-on-year growth is now up to 3.1% - the fastest rate of annual growth since fourth quarter of 2007. The level of GDP is now just 0.6% below its previous peak in Q1 2008,” he said.
The services sector and production industries made strong progress in the first quarter, but the construction sector only managed 0.3% while the small agricultural sector declined by 0.7%. Economists blamed wide-spread domestic flooding for these disappointing figures.
“Overall, these are good results for the UK economy and they confirm that the UK is one of the fastest growing economies in the advanced world,” said Zangana. “Looking ahead, we expect the economy to maintain a strong pace of growth, driven by loose credit conditions, low interest rates, and easing fiscal austerity. The rebound in the housing market is helping to boost household spending, while companies appear to be gaining in confidence and so are starting to increase levels of investment.”
Jeremy Cook, chief economist at the currency brokers, World First, said this sort of news – solid but not spectacular – was just what the economy needed to keep the recovery on track. Cook expected there would be little effect on interest rates.
