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UK economy to beat recession this year

09 May 2014

The National Institute of Economic and Social Research (NIESR) has reported that the economy may already be larger than its pre-2008 high.

Jonathan Portes, director of the NIESR, said: ‘The end of the great recession, it is an important moment. The British economy is very close to being bigger than it has ever been.

Symbolically, that matters, and it comes at a time when growth is clearly entrenched’.

Predictions are that GDP will grow by 2.9% in 2014, although GDP per capita is lower than pre-recession levels and not expected to rise until 2017. Pre-crisis levels were attained by countries like the USA and Germany in 2010.

Mr Portes added: ‘As far as individuals are concerned what really matters is how rich we are – per capita GDP – and that’s well below the level of 2008. In fact, take home pay is about 6% lower than it was then and won’t get back to its previous 2008 peak before, we reckon, another three or four years’.

UK growth is reportedly still based upon consumer spending, but the NIESR expects investment to increase this year.