UK’s GDP increases by 0.8% in Q1 2014, ONS report reveals

The UK GDP (gross domestic product) increased by 0.8% in Q1 2014 compared with growth of 0.7% in Q4 2013, marking a solid growth, albeit just a bit under existing forecasts.

Statistical figures obtained from the report also suggest that output increased in three of the four main industrial groupings within the economy in Q1 2014 compared with Q4 2013. In order of their contribution, output increased by 0.9% in services, 0.8% in production and 0.3% in construction. However, output decreased by 0.7% in agriculture.

The Index of Services increased by 2.7% in February 2014 compared with February 2013, with all of the main components of the services industries increasing in the most recent month compared with the same month a year ago.

The largest contributions came from: business services & finance, which contributed 1.4 percentage points to total growth; and distribution, hotels & restaurants, which contributed 0.7 percentage points to total growth.

The latest Index of Services estimates show that output increased by 0.2% between January 2014 and February 2014, following an increase of 0.3% between December 2013 and January 2014.

In Q1 2014 GDP was estimated to be 0.6% below the peak in Q1 2008. From peak to trough in 2009, the economy shrank by 7.2%. Nevertheless, GDP was 3.1% higher in Q1 2014 compared with the same quarter a year ago.

There was some evidence to suggest construction output was affected by the storms and high rainfall in January and February. However, over the quarter, the storms have not had a significant impact on GDP growth in Q1 2014 and ONS has not classified them as a statistical special event.

The figures released by the GDP follow the positive trend set by the Bank of England, which revised its estimate of the UK’s economic growth to 1% for the first quarter of 2014.

Earlier this month, the International Monetary Fund (IMF) also said it expects the UK to be the best-performing of the world’s largest economies in 2014, with growth of 2.9% for the year.