- The second-quarter UK GDP rose 0.4% compared to the previous three months.
- The main drivers of the second-quarter UK GDP were services and construction sectors.
- Household spending and business investment increased in the second quarter while industrial production was the growth dragger.
The UK second-quarter gross domestic product (GDP) met the market expectations increasing 0.4% over the quarter while rising 1.3% over the year, the Office for National Statistics said on Friday.
The pickup in the UK GDP was in line with expectations as the overall growth doubled in the second quarter and confirmed the Bank of England expectations of first quarter slowdown being a bad weather-related blip.
“Although modest by historical standards, the projected pace of GDP growth over the forecast is slightly faster than the diminished rate of supply growth, which averages around 1.5% per year. The MPC continues to judge that the UK economy currently has a very limited degree of slack,” the Bank of England August Inflation Report says.
With the UK second-quarter GDP at 1.3% over the year, it will take a better second half of the year to meet the goal with growth accelerating going into the year-end.
So far, the UK economy grew by 0.6% in the first half of 2018, compared with the second half of 2017 and it continued the declining trend seen since the second half of 2014.
In terms of the main GDP component driving the UK economic growth higher were services and construction that increased 0.5% and 0.9% Q/Q in the second quarter. Household spending and UK business investment also contributed positively rising 0.5% and 0.3% Q/Q in the second quarter while industrial production fell by 0.8% Q/Q.
Growth in household consumption strengthened slightly although it remained subdued while business investment increased compared to a very weak first quarter.
The trade deficit widened by £4.7 billion in current prices during the second quarter with net trade dragging on GDP growth as a result.
UK GDP growth rate in the quarter compared to a year ago
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