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UK growth accelerating and set to outpace peers: OECD

Economic growth in the UK is set to outpace all developed market peers, including the US and Germany, as it gathers pace in the latter half of 2013, research from the Organisation for Economic Co-operation and Development has suggested.

According to the OECD’s Interim Economic Assessment, the UK will experience quarter-on-quarter GDP growth of 3.7 per cent in Q3 2013 and 3.2 per cent in Q4. It estimates that at year-end UK GDP will have grown 1.5 per cent during 2013.

Of the seven other established economies - the United States, China, Japan, Germany, France, Italy and Canada - the only country set to grow faster during that time is China with 7.2 and 8.1 per cent forecasted for Q3 and Q4 respectively.

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The annual growth prediction for this year, which places the UK fifth on the scale of eight established economies for the period, is an increase on previous forecasts and outstrips that of Ernst and Young, which echoed an earlier Bank of England forecast of 1.1 per cent annual growth for 2013 in July.

Earlier this summer (25 July), the Office for National Statistics estimated GDP grew by 0.6 per cent in the second quarter of 2013 on an annualised basis.

Jorgen Elmeskov, deputy chief economist for the OECD, said in the Paris presentation of the assessment: “The gradual pick-up in momentum in the advanced economies is encouraging but a sustainable recovery is not yet firmly established. Major risks remain.

“The euro area is still vulnerable to renewed financial markets, banking and sovereign debt tensions. High levels of debt in some emerging markets have increased their vulnerability to financial shocks. And a renewal of brinksmanship over fiscal policy in the US could weaken confidence and trigger new episodes of financial turmoil.

“Continued support for demand is still needed to make sure recovery takes hold, and it remains vital that this be complemented by structural reforms to boost growth, rebalance the global economy and avoid a ratcheting-up of structural unemployment.”