First, the good news – the UK has recorded its best annual growth since the credit crisis hit and now looks like the strongest economic recovery in Europe.
The UK economy grew by 1.9 percent overall in 2013, according to preliminary estimates on Tuesday. This should make it Europe’s fastest-growing economy in 2013, and marks a resurgence that has outstripped government and Bank of England predictions.
Yet there are still potential nasty surprises in the woodshed.
Of the 0.7 percent growth in the last three months of 2013, services contributed 0.6 percent, led by business and financial services with 0.4 percent, and just 0.1 percent was contributed by manufacturing – suggesting that the government’s much-vaunted “March of the Makers” initiative it launched last year has not been successful. Construction output shrank during the quarter, belying optimistic noises from property companies.