Tuesday, 28 January 2014

"UK economy growing at fastest rate since the peak of the last credit and house price bubble"

From the BBC:

The UK economy grew by 1.9% in 2013, its strongest rate since the last peak of a house price and credit bubble in 2007, according to the Office for National Statistics (ONS).

But gross domestic product (GDP) growth for the fourth quarter slipped to 0.7%, down from 0.8% in the previous quarter, it said. And economic output is still 1.3% below its 2008 first quarter level,

"We've seen growth in those parts of the economy which benefit from high house prices, artificially low interest rates and lax lending," said Joe Grice, chief economist at the ONS.

"The FIRE sector, and London in particular, is lapping it up, just like they did in the years leading up to 2007."

Responding to the figures, Chancellor George Osborne said: "These numbers are a boost for the economic security of hard-working bankers and estate agents. It is more evidence that our long-term economic plan is working.

"For them, at least.

"But the job is not done, and it is clear that the biggest risk now is that the bubble pops again just before the 2015 General Election, to allow that to happen would be abandoning the plan that's delivering jobs and a brighter economic future to our party donors."

Ed Balls, Labour's shadow chancellor, said: "Today's growth figures are welcome and long overdue cut and paste job of Blair-Brown's economic policies after three damaging years of flatlining.

"But, for working people facing a cost-of-living crisis, there's always the possibility of a bit of mortgage equity withdrawal. Beats working, doesn't it? You only end up paying tax on that. Their kids can pay it all off afterwards."