British economy strengthens amid data overhaul

30th September 2014, Comments 0 comments

Britain's economy grew faster than expected in the second quarter to become 2.7 percent larger than its peak before the 2008 financial crisis, revised official data showed Tuesday.

Output grew 0.9 percent in the second quarter of 2014 compared with the prior three months, lifted from 0.8 percent by upward revisions for construction and services sectors, the Office for National Statistics (ONS) said.

That meant it expanded by 3.2 percent in the second quarter of 2014 compared to a year earlier.

First-quarter growth was downgraded to 0.7 percent, from 0.8 percent, due to weaker household expenditure.

But overall, "the latest figures for Q2 2014 show the UK recovery continuing," the ONS said in a statement, pointing out that the economy was now 2.7 percent bigger than the first quarter of 2008, before the recession took hold.

"A strengthening economy means more opportunities for hardworking taxpayers," tweeted British Prime Minister David Cameron in response.

The ONS also published a raft of drastic revisions going back decades, based on a new methodology for calculating gross domestic product (GDP).

The data showed Britain experienced a shallower downturn in 2008 and 2009 than previously thought -- and had also regained its pre-crisis peak last year.

The changes, aimed at bringing Britain into line with new European standards, include spending on illegal activities, such as drugs and prostitution, and also on research and development for the first time.

While Britain's economy shows signs of solid recovery, growth in the 18-country eurozone ground to a halt in the second quarter, dragged down by top economies France and Germany and casting a cloud over the crisis-hit region.

The revised figures also showed that the British economy overtook its pre-crisis 2008 peak in the third quarter of 2013, rather than the second quarter of 2014.

"Pre-crisis growth was slower, the recession shallower and the recovery to 2012 slightly stronger," said HSBC economist Simon Wells.

The latest data indicated Britain's economy shrank by 6.0 percent in a year-long downturn that began in the second quarter of 2008. The ONS had previously stated that it shrank by 7.2 percent.

© 2014 AFP

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