UK GDP followed on from the first quarter's growth with a second quarter growth of another 0.8 percent says the Office for national Statistics (ONS).

In good news for the UK economy GDP was also 3.1 percent higher in Q2 than the same time last year in 2013 Q2.

 

When looking at the groupings, output rose by one percent in services and by 0.4 percent in production, but fell by 0.5 percent in construction and by 0.2 percent in agriculture.

Guy Ellison at Investec Wealth & Investment said:

"The UK's reading of second quarter GDP data released today met expectations at 0.8% growth quarter-on-quarter, matching the growth rate in Q1 but symbolically marking the point where UK GDP is now ahead of the pre financial crisis levels. It has been a long slog though, with the UK the second to last member of the G7 group of economies to reach the milestone and taking much longer to rebound than in past recessions. The UK also received a boost from the International Monetary Fund yesterday as it upgraded its forecast for GDP growth this year to 3.2% from 2.8%, making it the fastest growing advanced economy."

John Cridland, CBI Director-General, said:

"With confidence rising and businesses investing we're starting to see a recovery built on solid foundations. We now have a strong launchpad to propel the economy forward.

"Our surveys have indicated that growth has been broad-based across sectors. The latest GDP figures show that the service sector performed strongly and manufacturing output continued to rise. While it has been a disappointing quarter for the construction sector, we expect this to pick up, with demand for new housing still high.

"While there are still risks to growth at home and abroad, we are hopeful the economy will keep motoring along at a steady pace for the rest of this year and next. Now it's important that we ensure everyone shares the benefits of growth, and this is a priority for business."

European Economist for Schroders, Azad Zangana, commented:

"The release of the preliminary estimate for second quarter UK GDP shows that the economy has surpassed its previous peak, set in 2008.

"GDP increased by 0.8% compared to the first quarter – in line with consensus estimates – and by 3.1% on a year-on-year basis. GDP is now 0.2% higher than its previous peak in Q1 2008, thanks to the sixth consecutive quarter of positive growth. Almost all of the growth in Q2 came from services. The production sectors grew by 0.4%, while the construction sector contracted by 0.5%.

"By international comparisons, the UK economic recovery has been slow. For example, Germany surpassed its pre-crisis peak in GDP in Q1 2011, while the US did so the following quarter. In Q1 2014, Germany's GDP was already 3.8% above that pre-crisis peak, while GDP for the US was 5.5% higher. The UK economy has a lot of catching up to do.

"Overall, another strong quarterly performance for the UK as signalled by business surveys. The International Monetary Fund's (IMF) recent forecast upgrade for UK GDP puts it as one of the best performers in the G7 for this year. While we expect a slight slowdown in growth in the second half of the year, the strong momentum that has been built should help broaden out the economic recovery further. Looking ahead, the Bank of England is closely examining the case for raising interest rates and looking for signs that spare capacity is being utilised. The latest GDP figures support this, along with the rapidly falling unemployment rate. However, falling average wages in real terms is likely to prompt a cautious approach."

John Bulford, economic advisor to the EY ITEM Club, said:

"The economy appears, at first glance, well on the road to recovery. But any euphoria can be quickly dampened by putting it into a wider context. Several of our peers' economies – most notably the US and Germany – have long regained their pre-crisis peaks. This is the first post-war economic cycle that sees the UK economy take as long to return to form, and GDP per capita is still well short of 2008 levels.

"The disparity between official figures, which show manufacturing output growing by just 0.2% and construction contracting by 0.5%, and business survey data, which show both sectors roaring ahead, is glaring. With that in mind, it would not be a surprise to see the Q2 figures revised up in the next release in mid-August."

UK GDP to Q2 2014

Click Graph to Enlarge

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