Published: 25th October 2013
Today’s announcement that the UK economy grew by 0.8 per cent in the third quarter has been described as “encouraging” by the IoD.
The figure for June to September was announced this morning by the Office for National Statistics (ONS).
“There is a trend and it is going in the right direction,” said IoD spokesman Christian May. “We know from a recent survey that 70 per cent of IoD members feel that economic confidence is higher than at the start of the financial crisis in 2008.”
However, the IoD remains cautious. “There are still some headwinds to deal with such as personal and household debt, inflationary pressures and schemes such as the government’s Help to Buy programme, which may generate problems in the future,” May added. “It is positive, but there are some concerns ahead and it’s not time for full-blown excitement yet.”
The figures build on a 0.7 per cent rise in the second quarter (April to June) and were welcomed by the government. Chancellor George Osborne tweeted: “0.8% growth. This shows that Britain’s hard work is paying off and the country is on the path to prosperity.”
The ONS says there has been a fairly strong performance across all industries. It revealed that production grew by 0.5 per cent – though this remains 12.8 per cent off its 2008 level – while, within this, manufacturing improved 0.9 per cent in the third quarter. It is the economy’s best quarterly performance since 2010.
“The outlook looks better than at any time since the onset of the financial crisis,” added IoD chief economist Graeme Leach. “By far the biggest challenges remain on the supply side, not the demand side. Supply side constraints mean that the current growth spurt is unlikely to extend beyond next year. This stage of our economic recovery is likely to be short and sweet, instead of long and strong.”
WATCH: IoD spokesman Christian May on the institute’s reaction to today’s GDP figures
WATCH: Joe Grice, ONS chief economist, explains today’s GDP statistics