According to a report by the Office For National Statistics (ONS) in June 2014 the UK now has one of the fastest growing economies in the G7.
Gross Domestic Product (GDP) is widely regarded as the key measure of economic activity and the ONS uses Nominal GDP – which measures the final market value of all goods and services produced in an economy – to compare the relative size of the UK economy to others in a given year.
The UK was the world’s eighth largest economy in 2012 in nominal GDP terms with the US – the world’s largest economy – producing $16.2 trillion of output in that year – just over seven times that of the UK ($2.3 trillion).
The decade prior to 2012 saw the rapid emergence of the BRIC economies – Brazil, Russia, India and China. Annual GDP growth in China averaged 12.7% per annum over this period, with the economy consequently establishing itself as the second largest in the world, producing $12.3 trillion of output in 2012. Brazil, Russia and India also achieved similar rates of expansion.
The economic recovery in the UK has been the slowest in post-war history and has also been one of the weakest in the G7 . UK real GDP increased by just 1.2% per annum between 2009 and 2013, the third lowest rate in the G7, and remains 0.6% below its pre-downturn peak while all other major economies have surpassed this milestone, with the exception of Italy.
However, throughout 2013 and in the first quarter of 2014, the UK has moved from having one of the slowest growth rates in the G7 to one of the fastest. GDP has risen by 3.1% over the year compared with growth of 2.3% in Germany and 2.0% in the US.
At the same time it has also emerged that manufacturers enjoyed their strongest annual growth for more than three years in April 2014 with manufacturing output rising by 0.4 on the previous month, leaving it up 4.4% on the year, the fastest expansion since early 2011.
That drove a pick-up for the wider industrial sector, which also includes utilities, mining and waste management. Industrial output was up 0.4% on the month and 3% on the year, again marking the strongest growth for more than three years.
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