UK GDP Growth Accelerates In Q2

Demolition Begins At The Burnt Out Glasgow Art School

Source Getty

Britain's economy bounced back in the second quarter after the Beast from the East cold snap nearly brought growth to a standstill.

June's GDP showed a "meagre" rise, he added, showing that the economy has "little momentum" heading into the third quarter, with the downside surprise largely coming from flat services output and the expenditure breakdown suggesting "consumers have started to adopt a more cautious mindset", with household spending up only 0.3% quarter-on-quarter in real terms.

Business investment increases by 0.5%. United Kingdom economic growth lags that of other major industrialized nations amid uncertainty over Britain's departure from European Union.

The UK growth rate nevertheless marked an acceleration from 0.2-per cent expansion in the first quarter, when GDP slid on frosty weather and heavy snowfall from the so-called Beast from the East.




Gross domestic product - the value of all goods and services produced in an economy - grew 0.4 per cent in the three months to the end of June, the Office for National Statistics (ONS) said in a statement.

The feel-good factor from England's performance in the World Cup - where the team reached the quarterfinals - is also said to have boosted growth. Meanwhile, production dropped 0.8 percent. Britain's government has yet to agree a divorce deal with Brussels and has stepped up planning for the possibility of leaving the bloc without any formal agreement. "However, manufacturing continued to fall back from its high point at the end of a year ago and underlying growth remained modest by historical standards", ONS statistician Rob Kent-Smith said. "Growth of 0.9 percent in construction also contributed positively to GDP growth", the ONS said. More recently, wages have risen more quickly than inflation but there have been signs that household finances remain stretched.

But news that the economy recovered from its winter slump is likely to reassure Bank of England policymakers who last week raised interest rates to a new post-financial crisis high of 0.75 percent despite concerns about the approach of Brexit. This was driven by a 0.9% fall in manufacturing and a 2.7% fall in energy supply, while mining and quarrying, and waste management production both rose by 0.7% and 1.9% respectively.

Latest News