Britain’s fast-recovering economy has climbed within a whisker of its peak before the financial crash, after GDP grew by a “robust” 0.8 per cent in the first three months of the year.
Chancellor George Osborne said the figures showed Britain was “coming back” but insisted it was still too soon to relax and warned “we can’t take that for granted”.
Total output is now only 0.6 per cent below the level reached in early 2008 when the start of the credit crunch sent the UK economy tumbling into a half-decade-long slump. It now seems almost certain that GDP will reach a new high in the spring quarter.
Mr Osborne said: “We have to carry on working through our long-term economic plan. For the first time in a decade all three main sectors of the economy — manufacturing, services and construction — have grown by at least three per cent over the last year.
“The impact of the Great Recession is still being felt, but the foundations for a broad-based recovery are now in place.”
But shadow chancellor Ed Balls said millions of people “are still feeling no recovery at all” because of the high cost of living and warned that the recovery might not be sustainable because of weak business investment and inadequate spending on infrastructure and housing.
Although the first quarter rate was marginally below City expectations it meant that year-on-year growth is now 3.1 per cent, the best annual growth rate since the fourth quarter of 2007.
Government statisticians said there was “some evidence” that the flooding and storms of January and February could have affected construction, but they were unlikely to have had a “significant” impact on GDP.
The fifth consecutive quarter of GDP growth comes as unemployment is falling and with inflation below its two per cent target and interest rates still at historic lows.
It is only a year since the Coalition was braced for confirmation of a “triple dip” recession. However, after that was avoided Britain has bounced back faster than any other major western economy.
Tories and Liberal Democrats were today falling over each other to take credit for the healthy growth unveiled by the Office for National Statistics.
Mr Osborne staged a visit this afternoon to the planned site of the UK’s first new garden city development in almost a century at Ebbsfleet, Kent.
Lib-Dem Treasury Minister Danny Alexander said the growth was “testament to the hard work of millions of British families”.
But TUC General Secretary Frances O’Grady said: “This is the kind of growth we could have seen two or three years ago if the Government had not choked off recovery through cuts, austerity and wage freezes.”
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