Pace of economic growth picked up last quarter

THE UK economy grew by 0.6% last quarter, increasing at a slightly-faster rate than at the start of the year.

Economic growth in the three months to June came in ahead of analysts’ expectations of 0.5%, which itself was just above the first-quarter figure of 0.4%.

The figure was boosted by a strong start to the quarter, and only just captured the EU referendum date and its immediate impact.

It is the 14th consecutive quarter of economic growth, stretching back to the start of 2013, and came in at 2.2% higher than a year ago.

Michael Hewson, chief market analyst at CMC Markets, said: “It almost seems like an irrelevance to talk about the first snapshot of UK Q2 GDP given recent events as a result of the Brexit vote just over a month ago, but this could be as good as it gets for a while for the UK.”

GDP and quarter-on-quarter growth:

Services increased by 0.5% and production increased by 2.1%. In contrast, construction decreased by 0.4% and agriculture decreased by 1.0%.

Chris Williamson, chief economist at Markit, said the strong industrial production and services growth figures need to be “treated with caution” and suggested the figures may be revised lower once June’s data becomes clearer.

He added: “The UK economy gained momentum in the second quarter before the EU referendum, but growth looks set to slow sharply in the third quarter, with the risk of a downturn having risen sharply as post-referendum data have disappointed.

“Policymakers won’t be especially interested in what happened prior to the June 23rd vote, and the August policy meeting at the Bank of England will instead focus on how the economy has fared since the Brexit vote.”