United Kingdom: Economy accelerates in Q2
August 28, 2015
In the second quarter, GDP expanded a seasonally-adjusted 0.7% over the previous quarter, according to more detailed data released by the Office for National Statistics (ONS) on 28 August. The print exceeded Q1’s 0.4% expansion and was in line with the preliminary estimate. In addition, the expansion met market expectations. Q2’s figure reflects that an improvement in the external sector more than offset a deterioration in domestic demand.
Private consumption grew 0.7% in Q2, which was slightly down from the 0.9% increase seen in the first quarter. In addition, growth in fixed investment decreased from 2.0% in Q1 to 0.9% in Q2. Conversely, government consumption expanded 0.9%, which matched the previous quarter’s increase.
On the external side, exports in Q2 expanded 3.9%, which marked a notable improvement over the 0.4% increase seen in the first quarter. Conversely, imports slowed to a 0.6% increase in Q2 (Q1: +2.3% quarter-on-quarter). As a result, the external sector’s net contribution to growth swung from minus 0.6 percentage points in Q1 to plus 1.0 percentage points in Q2.
In annual terms, GDP grew 2.6% in the first quarter. The figure met the preliminary estimate and marked a deceleration over the 2.9% increase seen in the first quarter.
Author: Dirina Mançellari, Senior Economist