GDP passes pre-recession peak with 0.8%

After UK GDP continued to grow at the same rate as seen in Q1, the economy is estimated to be 0.2% above the peak last seen in 2008.

GDP in Q2 was 3.1% higher than it was in the same period of 2013.

According to the ONS output increased by 1% in services and 0.4% in production. However output decreased by 0.5% in construction and 0.2% 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.”

Jeremy Duncombe, Director, Legal & General Mortgage Club, comments on the Hometrack Monthly National House Price Survey:

“After the rapid pace of house price inflation in parts of the country over the first six months of this year we are starting to see the pace of growth slow.  It is important over the coming few months that the government focusses on building a housing market that has sustainable growth. There has been much talk of a bubble developing in London, however other parts of the country have seen much lower levels of growth so any move to curb London prices could kill off these markets. The government needs to walk the line between encouraging growth in the regions and stopping London from growing excessively.”