26/07/2010
The British economy grew at double the rate forecast by economists in the second quarter of the year and, according to the chancellor, it's the growth of the private sector that has driven it.
That makes it the fastest expansion in four years, reports Business Week, thanks to rebounding services, manufacturing and construction igniting the economic recovery.
As reported by The Guardian, the economy grew almost twice as fast as expected thanks to a dramatic rebound in the construction sector and growth in the services sector.
According to the Office for National Statistics, GDP grew by 1.1% from April to June this year, after growing by 0.3% in the three months previous. The growth in the construction industry, which hit 6.6%, was the sector's biggest growth since 1963. Manufacturing increased by 1.6%, which is the largest increase for the industry since 1999. The services sector saw its best quarter for more than three years, growing by 0.9%.
Overall, this is the strongest annual growth recorded since before the recession. It suggests that now could be an opportune time for businesses to free up cash through commercial finance, so they can expand the business and make the most of the economic recovery.
However, experts have warned that the growth could be as good as it gets for a while, as the effects of the Budget begin to take effect, reports Sky News. Chancellor George Osborne said: "Today's figures show the private sector contributing all but 0.1% of the growth in the second quarter, and put beyond doubt that it was right to begin acting on the deficit now."
"While I am cautiously optimistic about the path for the economy, the job is not yet done," said Osborne. The priority now is to implement the Budget policies which support re-balancing and help ensure the sustained growth that the Office for Budget Responsibility forecast this year and next."
Laura Nineham