By Vivienne Russell | 25 July 2014
The size of the UK economy has finally surpassed the level recorded in the pre-crisis peak of early 2008, prompting senior government figures to hail a ‘major milestone’ on the economic road to recovery.
According to the Office for National Statistics’ preliminary growth estimates for the second quarter of 2014, the economy expanded by 0.8%, with output increasing in two of the four main industrial groupings – services and production by 1.0% and 0.4% respectively. However, output fell by 0.5% in construction and 0.2% in agriculture.
Gross domestic product was 3.1% higher than it was in the same quarter a year ago.
The size of the economy was estimated to be 0.2% above the peak recorded in the first quarter of 2008. From peak to trough, the size of the economic contraction in the UK was 7.2%, the ONS said.
Prime Minister David Cameron said on Twitter: ‘It's encouraging news that the economy is larger than pre-crash levels. Our Long Term Economic Plan is working & this is a major milestone.’
Chancellor George Osborne said: ‘Thanks to the hard work of the British people, today we reach a major milestone in our long-term economic plan.
‘But there is still a long way to go – the Great Recession was one of the deepest of any major economy and cost Britain six years. Now we owe it to hardworking taxpayers not to repeat the mistakes of the past and instead to continue with the plan that is delivering economic security and a brighter future for all.’
Commenting on the figures, Geraint Johnes, director at Lancaster University’s Work Foundation, said: ‘What do the figures say about the effectiveness of austerity and the management of the economy? The chancellor’s actions trump his rhetoric. Austerity was effectively abandoned a couple of years ago, and the economy has flourished - albeit in patches - since.
‘Nevertheless, the recovery has still not been consolidated; the UK cannot grow in isolation, and growth in many of our major export markets remains fragile. The best guess for 2015 is that growth will be lower than the rather remarkable results that are being achieved in the current year.’
