UK GDP PICKS UP PACE WITH BETTER WEATHER - Welcome to Soul 2 Soul Mates Blog


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GDP grew by 0.4 per cent in the three months to June, up from a revised growth of 0.1 per cent in the three months to May.

Head of national accounts at the Office for National Statistics, Rob Kent-Smith, said: “The economy picked up a little in the second quarter with both retail sales and construction helped by the good weather and rebounding from the effects of the snow earlier in the year.

"However, manufacturing continued to fall back from its high point at the end of last year and underlying growth remained modest by historical standards."

Bitain’s service sector drove growth in the last quarter, rising by 0.5 per cent, while construction also had a good quarter, expanding by 0.9 per cent.

But the industrial sector shrank by 0.8 per cent in the three months between April and June. That includes a 0.9 per cent contraction across the UK manufacturing base, although it rose 0.4 per cent in the month of June.

Nancy Curtin, chief investment officer at Close Brothers Asset Management, said: “A rebound in economic growth in the second quarter should be taken with a pinch of salt. Even with some acceleration, the economy is far from its peak.

"The rate of growth looks subdued in comparison to some global peers, with the US economy growing at twice the speed... Productivity is a major challenge for the UK economy and until further clarity is provided over the future trading relationship with the EU, businesses will continue to delay investment spend.

“However, it’s not all doom and gloom. The consumer is beginning to look a little stronger, supported by wages growing in real terms, and the weak pound has buoyed exporters. Investors will be hoping this trend continues despite the uncertain backdrop.”

Rob Hodgson, head of wealth management at GWM Investment Management, said: “The main indicators were suggesting a rebound from the weak first quarter and severe weather conditions had played their part in those numbers. Today’s data release comes amid a resilient jobs market and wage growth is starting to outstrip inflation.

"The Bank of England may have been slightly nervous about this data release because poor numbers would have put a spotlight on their decision to raise rates last week. It is important to remember that one quarter’s reading is of course a fairly brief snapshot. Looking at the bigger picture, UK economic growth is still way below the gains we were used to before the financial crisis.”

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