UK economy grows at fastest annual pace in over six years in second quarter
Britain’s economy kept up its strong growth in the second quarter of 2014 and its yearly pace of expansion was revised up to 3.2 percent, its best performance in more than six years, official data showed on Friday.
Gross domestic product expanded by 0.8 percent in the April-June period, as reported in preliminary data last month and the same pace as in the first three months of the year.
Compared with the second quarter of last year, the economy expanded by 3.2 percent, up slightly from an estimate of 3.1 percent in the preliminary reading.
That was the fastest yearly growth since the end of 2007, the Office for National Statistics said.
Economists in a Reuters poll had expected quarterly growth of 0.8 percent and a yearly expansion of 3.1 percent.
The ONS said the upward revision of the yearly growth rate was due to a performance by the construction sector that was stronger than assumed at the time of the preliminary estimate.
The data also confirmed that Britain’s economy was 0.2 percent bigger than in the first quarter of 2008, its previous peak before the financial crisis.
The ONS did not give a breakdown of the spending which drove Britain’s economic growth as it normally does when it issues its second reading of GDP. The ONS is changing its methodology for calculating GDP and will provide those details on Sept. 30.
Despite the strong pace of economic growth, the Bank of England this week dampened expectations of a rate hike this year. It said it was paying close attention to prospects for pay, which has been very weak in recent months.
The ONS confirmed that the dominant services sector was once again the main driver of Britain’s economy between April and June, expanding by 1.0 percent for the fastest quarterly growth since the third quarter of 2012.
In the month of June alone, the services sector expanded by 0.3 percent from May and by 3.6 percent compared with June of last year, its fastest annual growth rate since early 2008, the ONS said.
Manufacturing edged up just 0.2 percent between April and June, its weakest growth rate in more than a year.
Construction output was unchanged, a better performance than the preliminary reading which showed a contraction of 0.5 percent. It remained the first time that the sector has not grown since the start of 2013.
Only the services industry - which accounts for about 80 percent of Britain's economy - is now bigger than before the crisis, at 3 percent above its previous peak. Industrial output and construction are both still more than 10 percent smaller.