With a strong first half to the year the UK economy is on course to grow by more than 3% this year, one of the fastest growth rates in the G7. However, a closer analysis at the fundamentals of growth within the economy demonstrates that only the service sector is above its pre-recession peak, with all other sectors still below the level recorded at the start of 2008. The latest unemployment figures also showed a further decline in the number of people out of work. There were 2.08 million unemployed people in April to June 2014, down by 294,000 from the previous year. This means that the unemployment rate is now 6.4%, its lowest rate since late 2008. The latest forecasts from the Bank of England predict that GDP growth will maintain at 0.8% in Q3. The Bank is also confident that there is significant slack in the economy, allowing it to grow without rapid inflation. It maintains the view that business investment will increase this year with some evidence in official statistics. If business investment does maintain its increase the longer-term outlook for UK economic performance will be substantially improved.
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