Rising disposable income drives UK GDP growth

Britain’s economy grew more strongly than previously thought in the first three months of the year, and households’ disposable income rose at the fastest annual pace since 2001.

The economy grew 0.4% in the first quarter, the Office for National Statistics said yesterday, revising up from an initial estimate of 0.3% which the Bank of England and most other economists had thought too gloomy.

The ONS also revised up growth in year-on-year terms to 2.9% from 2.5%, a much stronger increase than economists had expected. For 2014 as a whole, growth was revised up to 3.0%, its fastest rate since 2006.