United Kingdom: Recovery picks up speed in Q2
July 25, 2013
In the second quarter, GDP expanded a seasonally-adjusted 0.6% over the previous quarter, according to a preliminary estimate released by the Office for National Statistics (ONS) on 25 July. The reading, which doubled the 0.3% rise recorded in Q1, was in line with market expectations and represented the second consecutive rise in national output.
The acceleration reflected improvements in all sectors of the economy. Agriculture recorded the strongest increase (Q2 2013: +1.1% quarter-on-quarter; Q1: -6.3% qoq), followed by construction (Q2: +0.9% qoq; Q1: -1.8% qoq). Industry and services expanded at the same 0.6% pace recorded in Q1.
In annual terms, GDP growth picked up from a mere 0.3% in the first quarter to 1.4% in the second quarter, which marks the strongest result since the first quarter of 2011. In its latest inflation report from May, the Bank of England (BoE) projects the economy to grow 1.1% this year and 1.7% in 2014. FocusEconomics Consensus Forecast panellists are less optimistic and expect the economy to grow 0.7% this year, which is unchanged from the previous month's estimate, but a notch above the revised 0.6% projected by the Office for Budget Responsibility (OBR). The panel sees growth accelerating to 1.5% in 2014.
Author: Armando Ciccarelli, Head of Data Solutions