From rescue to recovery: UK economic growth revised up to 0.7%

Finally! The UK is “moving from rescue to recovery” as economic growth for the second quarter of 2013 has been revised from 0.6% to 0.7%.

Manufacturing, construction and parts of services sectors saw small upward revisions.

In further good news, second-quarter growth was more than double from the 0.3% expansion in the first three months.

As the housing market benefited from schemes like Help to Buy and Funding for lending. output from the UK’s building sites expanded by 1.4% in the second quarter from an initial 0.9% estimate.

Output from Factories too shot up by 0.7% up from an initial 0.4% estimate.

Growth in business and finance firms was revised from 0.5% to 0.6% and output from distribution, hotels and catering firms was revised up to 1.7% from 1.5%.

While output from the agriculture sector was revised up to 1.7% from the 1.1% estimate, the overall services sector growth remained unchanged at 0.6%.

A Treasury spokeswoman said: “There is still a long way to go, but the economy is on the right track and the Government is committed to its economic plan that has already cut the deficit by a third and enabled the private sector to create over 1.3 million new jobs.”

ICAEW Chief Executive, Michael Izza, said: “Today’s revised GDP figures coupled with the recent commitment from the Bank of England to keep interest rates static until unemployment falls below 7% should encourage UK plc to start spending some of the £489bn* currently held on balance sheets. Getting this money back into the economy will be vital for a sustained recovery.”

David Kern, chief economist at the British Chambers of Commerce (BCC) said:

“The modest upgrade provides further evidence that the UK recovery is gradually gathering momentum. While there is no room for complacency, as the level of UK output is still more than 3% below its pre-recession level, this will help to sustain business confidence. Business investment is still too weak in spite of the modest rise, but the figures support our view that Britain’s trading position is improving. Although the rebalancing towards net exports is taking some time, we have seen a significant narrowing of the trade deficit in the first half of this year.

“To build on this positive news, the government and the MPC must make every effort to maintain the recovery and to ensure that there are no setbacks. The international situation is still uncertain, particularly in some of the key emerging markets, and the eurozone may still face new problems, despite the fact that the region has returned to growth. Measures to support growth are still needed, with particular focus on ensuring that viable firms are able to obtain adequate finance.”