29 Jan 2014
Business groups have welcomed the latest figures from the Office for National Statistics (ONS), which reveal that the UK economy grew by 1.9% in 2013, but have warned that further action is needed in order to safeguard economic recovery in the longer term.
The latest ONS figures represent the strongest rate of growth since 2007, although growth in GDP slipped from 0.8% to 0.7% in the final quarter of the year.
There was positive news for the UK services sector, which grew by 0.8% in the fourth quarter, while manufacturing output grew by 0.9%. However, growth in industrial production fell from 0.8% to 0.7%, and construction output fell by 0.3%.
Commenting on the news, Chancellor George Osborne said, ‘The economic recovery is broadly based with manufacturing growing more than other sectors, and that’s evidence that the long-term economic plan is working’.
‘There’s plenty more to do but we’re heading in the right direction.’
However, while acknowledging an increase in UK business confidence, some experts have raised concerns over the nature and sustainability of the recovery.
Business Secretary Vince Cable warned that the recovery is ‘heavily based’ on housing prices and consumer spending, and highlighted the need to rebalance the economy in order to avoid a ‘boom-bust’ cycle.
John Longworth, Director General of the British Chambers of Commerce (BCC), said, ‘It is of course heartening that Britain is now amongst the fastest-growing advanced economies. But more must be done to shore up the foundations of this recovery if it is to be a lasting one. Unless we do much better on the three ‘T’s – training, transport infrastructure and trade support – our aspirations for investment at home and success around the globe cannot be achieved’.
The Forum of Private Business (FPB) echoed the BCC’s outlook, highlighting the importance of achieving sustainable growth.
Alexander Jackman, FPB Head of Policy, said, ‘This fourth quarter of successive growth will do much to boost business confidence further as we start 2014 in earnest. It is important now to ensure this growth is sustained and that businesses across the board are able to invest. From trading in new markets to taking on new people, small businesses still require support to ensure they make the right investments for their business’.