UK GDP sees slight increase on last quarter

New figures from the Office for National Statistics (ONS) show that in the three months to June, UK GDP grew by 0.5% compared to the previous quarter. This represents a significant improvement from the ONS’s previous estimate of 0.4%.

The upward revision was due to a higher estimate for manufacturing output, which was found to have contracted by only 0.3%, compared with preliminary estimates of a 0.7% drop.

Annual UK growth was also revised up by 0.1% to 1.8% during the second quarter.
Consumer spending growth, however, increased only slightly to a rate of 0.2%, from 0.1% in the first three months of the year.

Deutsche Bank economist George Buckley said: “On the one hand the market got the 0.1% upward revision it was looking for, on the other consumption growth remains weak.”

Analysts agreen that the upward revision would have no significant effect on interest rates.

Philip Shaw at Investec said: “We still expect rates to come down but not until next year”.