The UK economy has grown more than expected in 2012.
Growth in several sectors including construction caused the Office for National Statistics to revise its forecasts – changing the expected figure of no growth to 0.3 percent.
Revisions to the performances of some sectors in the last quarter of 2012 is believed to be part of the reason for the improved statistic, while the Olympics provided a welcome boost in Q3.
However some sectors performed worse than expected. The production industry was revised down from a 1.8 percent contraction to 1.9 percent.
Credit ratings agency Moodys took away the UK’s AAA credit rating last week, saying that any growth in the UK economy would “remain sluggish” for the coming years. One idea to continue to help the economy, floated by Bank of England Deputy Governor Paul Tucker, is to introduce negative interest rates. That would change the rates the central bank charges other banks to hold money, which could encourage banks currently unwilling to lend money to do so. A recent billion pound boost to the SME economy will help, too.
Speaking at the CAT Awards 2013, Business Secretary Vince Cable spoke of the importance of the UK manufacturing sector, promising that more would be done to improve access to funds for small businesses.
UK companies dealing with Europe will need to be vigilant, especially as major events in the European Union – such as the indecisive parliamentary election in Italy – continue to unfold.