It has been confirmed by the Office of National Statistics last week that the UK’s gross domestic product has grown by 0.7%. This is the highest rate that the GDP has been measured at in the last 3 years.
This is an encouraging sign as in 2012 the entire economy grew a mere 0.1%. This shows that the economy is growing but nonetheless, sceptics still remain.
Contrary to predictions, business investments were down to 2.7% from previous months, as opposed to the anticipated 0.9% growth.
Business investments have declined by 8.5% since 2012 and to many this is a cause for concern. Specific business investments such as Industrial and Machinery Investments fell by £1.2 billion to a total of £9.8 billion, which is not an encouraging sign.
In addition, foreign trade was expected to cause a jolt to the economy but provided little stimulation.
On the brighter side, ONS reported a 1.5% increase in income. Which is speculated to be due to the generous 5% tax breaks seen earlier this year.
In addition, household expenditure has seen an increase of 0.3% this quarter which may show a trend of increasing consumer confidence.
The Bank of England has stated several times that they will only increase the interest rate when unemployment falls to 7%, the latest data shows it may not be that far in the future. The current unemployment rate has dropped from 7.8% to 7.7%. This causes many critics to wonder how long the rate can stay this low.
The Bank of England expressed that they must wait till employment levels stabilize in order to raise the interest rates in addition to ending quantitative easing in order to avoid spikes in inflation.
Nationwide economic health seems to be improving and many believe that the UK’s prospects are improving.
Overall deficit has shrunk down to £13.2 billion from the previous £14.4 billion. The nation’s economy seems to be in better health and is recovering quite steadily from the recession in 2008.
However, the work is far from complete and it is a crucial time which must be dealt with accordingly.
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