Fifteen months of consecutive growth looks very good to continue
Yesterday figures were released showing that the UK economy has experienced a growth rate of 0.8%. Although this is 0.6% lower than the growth rate back in 2008, the UK has been leading the way out of the recession.
Overall growth for the first quarter was up by 0.8% with all sectors showing strong signs of growth. The poorest performer was construction up just 0.3%. However the appalling weather experienced during this period certainly put a dampener on the construction industry.
Construction is very much on the increase, helped by low interest rates, low unemployment, increase in confidence and feel good, lenders becoming increasingly keen to provide residential and commercial mortgages and the help to buy scheme. Therefore we can expect a significant improvement in this figure when the next quarter’s figures are produced.
Small manufacturers have led the way during this first quarter with growth rate of an impressive 1.3%.
Many are not yet feeling the benefits
Overall the UK is doing very well and is very much demonstrating a strong recovery. However the cost of living has certainly increased and many people are not yet feeling the benefits. Time will hopefully help as these sorts of changes do not happen overnight. When the credit crunch first hit many people did not feel the negative effects until some time afterwards. People working in the construction industry were hit by and felt the effects of the credit crunch very quickly. It is probably only fair that they are amongst the first to feel the benefits of an improving economy! As we experience strong growth more and more people will start to feel the benefits. It has to start somewhere and this is then passed on and very much shared out.
With low inflation interest rates will stay low
Further good news is that growth of 0.8% is accompanied by inflation figures for March of just 1.6%. This lowest figure in 4 years means that there is no immediate pressure on the Bank of England to put up interest rates.
Other countries have watched carefully to see if the economic policies introduced by the current Government and the Bank of England would have a positive effect. The positive results have naturally led to other countries adopting some of the UK’s economic policies.