UK economy grew twice as fast as expected in Q2

Britain’s economy grew almost twice as fast as expected in the second quarter of this year, buoyed by a sharp pick-up in services output and the fastest rise in construction output in almost 50 years, according to official data. The Office for National Statistics said GDP jumped 1.1 percent on the quarter, the fastest rise […]

 
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Britain’s economy grew almost twice as fast as expected in the second quarter of this year, buoyed by a sharp pick-up in services output and the fastest rise in construction output in almost 50 years, according to official data.

The Office for National Statistics said GDP jumped 1.1 percent on the quarter, the fastest rise in four years, and rose by 1.6 percent on the year – the highest in two years.

The figures may raise doubts over how long the Bank of England will keep interest rates at their record low, particularly with inflation running so far above target.

Britain’s services sector enjoyed its fastest growth in three years, expanding by 0.9 percent on the quarter – three times as fast as in Q1 and contributing 0.7 percentage points to growth.

Manufacturing grew 1.6 percent, its biggest rise in more than 10 years.

Construction, meanwhile, leapt by 6.6 percent on the quarter – its fastest rate since 1963. The construction data was based for the first time on a new monthly survey, rather than estimates which used to be used at this stage.

The ONS said the rebound in construction output in Q2 came after a fall of 1.6 percent in Q1 which was due to the poor weather. Construction output contributed 0.4 percentage points to growth between April and June.