UK GDP beats expectations to rise 0.6% in Q2

Position of strength ahead of Brexit

clock • 1 min read

UK GDP grew by 0.6% in the second quarter of the year, higher than analyst expectations of 0.4% for the period covering the vote to leave the EU, according to the Office for National Statistics.

In the preliminary estimate, the ONS said today's figure for the three months to the end of June is an increase on the 0.4% growth during the first quarter of the year, and a 2.2% increase year-on-year.

Although the period only includes data up to one week after the referendum, it indicates the country approached Brexit from a period of relative strength. There have now been 14 consecutive quarters of positive GDP growth.

Chancellor Philip Hammond said the figures indicated "the fundamentals of the British economy are strong" and reiterated the government would do "whatever action is necessary" to support the economy.

GDP is now 7.7% higher than it was at the pre-economic downturn peak in the first quarter of 2008.

The two main sectors to see a boost in output this quarter were services, which increased by 0.5%, and production which increased by 2.1%. Construction declined by 0.4% and agriculture declined by 1%. 

Hargreaves Lansdown senior economist Ben Brettell said: "The UK economy shook off pre-referendum nerves to grow by a better-than-expected 0.6% in the second quarter, with a notably strong performance from the manufacturing sector.

"It is always difficult to tell where you are going by looking in the rear-view mirror, and as such today's GDP figures cannot be taken as evidence of the current climate. However, what they do show is an absence of pre-Brexit concerns, meaning that if the forecast downturn does materialise, at least we start from a position of relative strength."

However, Brettell said other leading indicators such as falling consumer confidence and PMI data signalled a recession could be "self-fulfilling prophecy".  

More on Regulation

PFS turmoil continues as interim CEO Don MacIntyre exits

PFS turmoil continues as interim CEO Don MacIntyre exits

Organisation has been at loggerheads with CII

Jenna Brown
clock 05 November 2024 • 2 min read
Implications of the PRA's 2025 life insurance stress test

Implications of the PRA's 2025 life insurance stress test

A regulatory shift

Sheikh Yasir
clock 01 November 2024 • 4 min read
Industry reacts: Autumn Budget 2024

Industry reacts: Autumn Budget 2024

Missed opportunities for health

Cameron Roberts
clock 31 October 2024 • 5 min read

Highlights

COVER Survey: Advisers damning of protection insurer service levels

COVER Survey: Advisers damning of protection insurer service levels

"It takes longer than ever to get underwriting terms"

John Brazier
clock 12 October 2023 • 5 min read
Online reviews trump price for young people selecting life and health cover

Online reviews trump price for young people selecting life and health cover

According to latest ReMark report

John Brazier
clock 11 October 2023 • 2 min read
ABI members with staff neurodiversity policy nearly doubles

ABI members with staff neurodiversity policy nearly doubles

Women within executive teams have grown to 32%

Jaskeet Briah
clock 10 October 2023 • 3 min read