Positive news from the Office for National Statistics that the UK economy expanded 0.8% in Q3 2013 – the strongest quarterly growth figure since 2010 – is further evidence that economic recovery is under way, say analysts at Milton Keynes-based PwC.
The figures show that this is driven by continued strong growth in retail sales and business services. Services output is now back above its pre-recession peak, even though total GDP is still 2.5% below that peak.
PwC estimates that UK GDP growth will average 1.4% in 2013. Barring any major adverse global shocks, this should rise to around 2.4% next year.
Milton Keynes has been credited with leading the country in terms of economic growth and has attracted an impressive amount of inward investment from blue chip firms. The number of people out of work in Milton Keynes is also well below the national average.
Cumulatively, such factors are contributing to a growing sense of business confidence.
Mike Robinson, senior partner at PwC’s Milton Keynes office, said: “It is becoming clear that stability linked to low interest rates and the Bank of England’s commitment to maintain this for some time yet is having a positive impact on the economy as a whole.
“In particular, it is helping to boost confidence by ensuring that businesses, investors and consumers have a higher degree of certainty as to the cost of funding in the short to medium term.
“However, the decision to link any interest rate increase to the UK unemployment rate could be problematic for some parts of the country where unemployment levels are static or not falling as strongly as elsewhere.
“In Milton Keynes, while unemployment levels are relatively low compared to some other areas of the UK, it is important that any interest rate rise does not come too soon.”
