In the last outlook paper in 1H13, we suggested there were signs that the UK economy was stabilizing. Since 2Q13 there has been a raft of improvements in key economic indicators over the summer months. In August GDP growth of 0.7% was announced for 2Q13, following 0.3% growth in 1Q13, meaning that the UK economic recovery is starting to gain traction. In June the Office of National Statistics (ONS) revised its GDP figures upwards for the beginning of 2012, signifying that the UK had not experienced a double-dip recession as first thought.
This confirms that the UK economy is now on track and is seeing a more robust recovery this year than originally anticipated, with growth of 1.5% per annum (p.a.) expected. Moreover, the UK’s relative position in a global context has also improved and it appears that the eurozone is also stabilising. Looking further ahead to 2014, the economic recovery, which is already underway, is expected to strengthen and grow by 2.3% p.a. The UK outlook has also strengthened in a global context, with UK prospects improving during 2013 compared with the key global economies of the US, eurozone and Japan.
Source : UBS AG