THE economy in 2013 recorded its fastest annual growth since the financial crisis despite a slight slowdown in the last three months of the year, official data has confirmed.
Supporting expectations for a bright 2014, Britain’s gross domestic product rose by 0.7 per cent in the fourth quarter, the Office for National Statistics said.
This rapid rate of growth is likely to increase speculation about when the Bank of England will raise record-low interest rates.
Governor Mark Carney has said there is no need for rates to rise anytime soon, as Britain’s total output is still well below pre-crisis levels.
But unemployment has fallen far faster than the Bank forecast in August, raising questions about what long-term inflation pressures might be building in the economy.
Tuesday’s quarterly GDP figure took Britain’s full-year growth for 2013 up to 1.9 per cent from just 0.3 per cent the year before.
This is the highest since 2007, although total output is still 1.3 per cent below the pre-financial crisis peak reached in the first three months of 2008 - a weaker situation than in almost all other big advanced economies.
Prime Minister David Cameron said: “The GDP figures are another sign our long-term economic plan is working - more growth means more jobs, security and opportunities for people.”
A long list of economic indicators over the last few months have suggested Britain’s economy is recovering faster than either policymakers or independent forecasters predicted, but critics have warned that the recovery is not evenly spread.
Shadow Chancellor Ed Balls said: “Today’s growth figures are welcome and long overdue after three damaging years of flatlining.
“But for working people facing a cost-of-living crisis this is still no recovery at all.
“And with business investment still weak, construction output down and housing demand outstripping housing supply, this is not yet a recovery that is built to last.”
The TUC added that the recovery is yet to reach whole swathes of the country or feed into people’s pay packets.