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UK annual GDP growth revised down for Q2, July services weak

The quarterly growth rate was unrevised at 0.3%

Reuters  |  London 

A man walks past a car scrap yard in east London. Photo: Reuters
A man walks past a car scrap yard in east London. Photo: Reuters

Britain's recorded its weakest year-on-year since 2013 in the three months to the end of June, and the major sector contracted in July, showing a possible loss of momentum as the prepares to raise interest rates for the first time in a decade.

Official data showed year-on-year gross domestic product slowed to 1.5 per cent in the second quarter from 1.8 per cent in the first three months of the year.

This bucked economists' expectations in a Reuters poll for it to be unchanged from an earlier 1.7 per cent estimate.

The quarterly rate was unrevised at 0.3 per cent, the Office for National Statistics said.

However, there was more positive news in the composition of in the second quarter, which showed bigger contributions from business investment and exports than previously thought.

"There was a notable slowdown in in the first half of 2017. The often buoyant sector was the only area to grow in the second quarter," ONS statistician Darren Morgan said.

But July figures for the sector, which makes up 80 per cent of the economy, showed a 0.2 per cent decline on the month after of 0.3 per cent in June.

After faster than expected in 2016, Britain's has underperformed its peers so far this year as the effect of a weaker currency since last year's Brexit vote catches up with consumers.

Friday's data confirms that in the first half of 2017 was the slowest for the first half of any year since 2012.

Britain's deficit, was 4.6 per cent in the second quarter, up from 4.4 per cent in Q1.

In cash terms, the was 23.182 billion pounds compared with economists' forecasts of 16 billion pounds, after a big upward revision to the first-quarter

Consumer confidence figures from market research company GfK, released overnight, showed morale inched up in September, despite rising pessimism about household finances, but house price data for Nationwide showed the slowest in over 4 years.

The has said it expects to raise interest rates in the coming months to tackle rising consumer price inflation, which it expects will exceed 3 percent in October.

Most economists expect a rate rise will come after the BoE's next Monetary Policy Committee meeting on Nov. 2.

BoE Governor Mark Carney said in a radio interview earlier on Friday that policymakers had given about as clear a signal on rates as possible, and that the was on track for rates to rise in the relatively near future.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, September 29 2017. 15:59 IST