UK economy grew by 0.5% in the second quarter — Asharq Al-Awsat

Britain’s gross domestic product grew by 0.5% in April–June, while the preliminary estimate had projected growth of 0.4%. The revised data were released by the UK Office for National Statistics, Asharq Al-Awsat reports.

GDP estimate revised

Despite the upward revision, economic growth in the second quarter slowed compared with the first three months of the year. In January–March, the country’s GDP grew by 0.6%.

Liz McKeown, director of economic statistics at the Office for National Statistics, said that stronger growth in the services sector in the second quarter means that the British economy turned out to be somewhat larger than previously thought.

Budget decisions in October

The revised data were released ahead of the annual budget update scheduled for October 28. Prime Minister Andy Burnham has described reducing the cost of living as one of the main priorities of his Labour government.

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Finance Minister John Healey, who is to present the budget, promised to maintain strict fiscal discipline. This comes amid accelerating inflation and government bond yields rising to multi-year highs this month.

Economists’ assessment

Richard Carter, head of fixed income research at Quilter Cheviot, noted that the growth figure was only marginally better than initial expectations. According to him, households and businesses continue to face high borrowing costs, inflationary pressure and a cooling labour market.

Carter also pointed out that after the second quarter, the economic outlook became less certain because of the recent increase in energy prices and borrowing costs.