Temperatures boost UK economy for Q2

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Warm temperatures and the celebratory mood created by England’s performance in the World Cup were both contributing factors to a 0.4 per cent growth in the UK economy throughout the three months ending June 30, according to the latest estimates from the Office of National Statistics (ONS).

Their latest data suggests that the weather-dependent construction sector enjoyed the largest gains, up 0.9 per cent on the previous quarter, which had seen relatively flat performance due to snow.

Meanwhile, Britain’s tertiary sector – which accounts for almost 80 per cent of total gross domestic product – was up by a half percentile on the opening quarter.

But the numbers suggest a mixed bag when it comes to the wider picture: with Q2 industrial production down by 0.8 per cent, and a near doubling of the UK’s trade deficit (to £8.6bn) in the lead up to summer.

ONS accounts chief Rob Kent-Smith said that the provisional figures suggested that “underlying growth remains modest by historical standards.”

The sentiment has been echoed by business representatives. “While there was a welcome uptick in GDP growth in the second quarter, the figures have been flattered somewhat by a very weak first quarter, and so does little to alter the UK’s lacklustre growth trajectory,” said head of economics at the British Chambers of Commerce, Suren Thiru.

“Despite growth in the second quarter, there is little in the latest data to suggest a sustained upturn in the UK’s economic growth prospects, or evidence to corroborate the [Bank of England’s] decision to raise interest rates. Against this backdrop, there must be a greater focus on lifting the UK out of its current low-growth trajectory, including incentivising business investment and addressing the escalating burden of upfront costs facing UK firms.”

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