DCSIMG

North West economy recovering

WIGAN - WEP
Stephen Elliott - staff contributing for a new column at Fairhurst Accountants, Wigan.

WIGAN - WEP Stephen Elliott - staff contributing for a new column at Fairhurst Accountants, Wigan.

Recently published UK GDP figures show that the UK economy as a whole has finally risen above the pre-recession peak from 2008, almost six and a half years later.

In the North West, GDP growth will rise from 1.6 per cent in 2013 to around 2.9 per cent in 2014 (revised up from the two-four per cent predicted in March).

Interest rates are expected to rise in 2014/15, and while this will help savers and reduce pension fund deficits, households will need to bear in mind future mortgage rate increases, especially if fixed rate mortgages revert back to variable rates.

It appears that house prices in the North West are rising, up by as much as seven per cent so far in 2014.

By the end of 2015 the average property in the region could be worth around £184,000, up from £163,000 in 2013.

The reason why it has taken so long to recover this time around is mainly due to the size of the economic hit.

The 2008/09 recession showed a contraction in growth of over seven per cent whilst the two previous recessions saw falls of 2.4 per cent and 5.9 per cent.

Since the 2008 slump the Government had hoped to shift away from a reliance on the service sector and see additional growth in other

sectors.

However the four main sectors since 2008 have followed a familiar pattern.

The services sector (including the much maligned financial services sector) achieved three per cent growth while construction is down more than10 per cent, as is Production down more than 11 per cent and Agriculture down five per cent.

Like it or not the service sector is responsible for a large part of the economy and the recovery to date.

Unemployment across the North WEST region has also contuned to fall, with the latest figures showing it fell by 10,000 in the quarter to May 2014.

 

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