UK economy surges past pre-crisis high

UK's economy may have grown larger than what it was before the financial crisis - a sign that the Great Recession was well and truly behind, according to a respected think tank.

According to the National Institute of Economic and Social Research (NIESR), "robust" growth helped the economy to expand by 1 per cent and 1.2 per cent in the three months to April.

Growth at the upper end of this estimate would mean the UK had surged ahead of its pre-crisis peak last month, with the economy finally recouping the losses it suffered in the recession.

The Telegraph newspaper quoted Jack Meaning, a research fellow at NIESR as saying, whether the UK made it in the estimates or not would be a matter of 0.1 percentage points. Investment was going to start picking up again now that credit was getting out to firms, de said, adding that the UK had a reasonably strong performance from the retail sector, and that consumer spending had been echoing that.

The economy shrank 7.2 per cent, or by around £111 billion, in the recession, the second steepest fall in the G7.

According to the Office for National Statistics, growth of 0.8 per cent in the first three months of the year meant the economy was 0.6 per cent smaller in March than it was at its peak in 2008.

The longest economic downturn for more than 100 years was finally over, experts said last night.

According to commentators, the growth spurt at the start of 2014 meant the recession was finally over, in a development that came as a major boost to George Osborne ahead of next year's general election.

According to the Organisation for Economic Co-operation and Development (OECD), the chancellor had been 'proven right' in his decision to stick to his austerity plans in the face of opposition from Labour, the unions and other Left-wing critics.

The vote of confidence from one of the world's leading watchdogs came as research group Markit suggested hiring at UK firms had hit 100,000 new staff a month – equal to 1.2 million a year.

However, the recovery had triggered speculation that the Bank of England would be forced to hike interest rates before the end of the year, having held them at an all-time low of 0.5 per cent since 2009.

Mailonline quoted Rob Wood, a former economist at the central bank who now worked at Berenberg Bank, as saying that the record low interest rates were no longer necessary. The economy was growing rapidly and, if anything, was picking up pace, he added.