Economy mending, says Chancellor
Britain's beleaguered economy is finally "on the mend", Chancellor George Osborne said, as official figures showed a second successive quarter of growth.
All four main sectors showed improvement - the first time Britain has been firing on all cylinders for nearly three years, according to the Office for National Statistics.
The estimate of a 0.6% rise in gross domestic product (GDP) was the first time since 2011 that the UK has seen back-to-back quarterly growth, and doubled the 0.3% figure for the last period.
It was in line with expectations but the fact that the struggling construction and manufacturing sectors managed to swing into expansion were seen as particularly encouraging as it suggested a broad-based improvement.
The Chancellor hailed the figures as a vindication of the coalition's austerity policies, tweeting: "Britain's holding its nerve, we're sticking to our plan, the economy's on the mend. But still a long way to go." Prime Minister David Cameron said they showed Britain was on the right track and "building an economy for hard working people".
Some economists doubt that the level of growth can be sustained in the second half of the year given that wages are still failing to keep pace with inflation. While growth is seen as likely to continue, they suggest it could slip back to around 0.4% for each quarter. Forecasts for the full-year are around the 1% mark, with an accelerating rate in 2014.
The 0.6% rise in GDP for the second quarter of 2013 saw services, production, construction and agriculture all up together for the first time since the third quarter of 2010. The most significant contribution again came from the powerhouse services sector, which represents three-quarters of the economy. It grew 0.6%.
Within this area, business services and finance rose 0.5% after slipping back in the first quarter - with architectural and engineering activities making the strongest contribution. Hotels, restaurants and distribution also contributed to the services rise as they grew by 1.5%.
Vicky Redwood, of Capital Economics, said: "Of course, we shouldn't get too carried away. Even a 0.6% quarterly rise is fairly mediocre after such a deep recession and GDP is still 3.3% below its peak. And with households' real pay still falling, bank lending flat and public sector austerity measures building, the economy may struggle to maintain its recent rate of growth in the second half of this year."
Shadow chancellor Ed Balls said: "This economic growth is both welcome and long overdue. But families on middle and low incomes are still not seeing any recovery in their living standards."