UK GDP +0.8% in Q2 puts economy back to pre-Lehman level

UK GDP increased by 0.8% in the second quarter of the year bringing the year-on year figure to 3.1%.  These figures were in line with the consensus estimates and puts the economy at a level which is 0.2% higher than the peak way back before the Lehman crisis in Q1 2008.  Chancellor George Osborne played down the historical significance of the figure saying that there was plenty more to do, perhaps conscious of the recovery being almost entirely due to the service sector compared to stagnant production and construction.  However, this is broadly positive data and keeps the UK among the best performers in G7 without putting pressure on the Bank of England to raise interest rates, particularly in the absence of evidence increasing wages.