UK Q2 Prelim GDP rises to 0.4% q/q, bang on expectations

The UK GDP first estimate showed that the GDP figures came in at 0.4% q/q in the second quarter of 2018, double than 0.2% seen in the first quarter, while matching the expectations.

While on an annualized basis, the UK economy’s growth rate arrived at 1.3% in Q2, meeting the consensus forecasts of 1.3% while rising from 1.2%.

Main Points (via Office for National Statistics)

• UK GDP growth was the slowest since Quarter 4 2012, with construction being the largest downward pull on GDP, falling by 3.3%.
• Production increased by 0.7%, with manufacturing growth slowing to 0.2%; slowing manufacturing was partially offset by an increase in energy production due to the below-average temperatures.
• The services industries were the largest contributor to GDP growth, increasing by 0.3% in Quarter 1 2018, although the longer-term trend continues to show a weakening in services growth.

Separately, the UK GDP monthly release showed that the economy expanded 0.1% in June versus 0.2% expected growth and 0.3% previous. Meanwhile, Index of services (June) came in at 0.0% vs +0.2% m/m expected and Index of services (June) arrived at +0.5% vs +0.6% 3m/3m expected.