Published: Sun, August 12, 2018
Money | By Ralph Mccoy

United Kingdom economy accelerates in the 2nd quarter

United Kingdom economy accelerates in the 2nd quarter

Britain's economy bounced back in the second quarter after the Beast from the East cold snap nearly brought growth to a standstill.

The ONS said weather had been a factor in economic performance; poor weather contributed to low growth in the first quarter while better weather this summer provided a boost to areas such as retail and construction in the second quarter.

According to data published by the Office for National Statistics (ONS), the United Kingdom economy expanded 0.4 per cent in the second quarter, up from just 0.2 per cent at the start of the year. United Kingdom economic growth lags that of other major industrialized nations amid uncertainty over Britain's departure from European Union.

On an annual basis the economy has grown by 1.3pc. Net trade was the biggest drag on the economy since the third quarter of 2016.

World Cup revellers sent the cash tills ringing as manager Gareth Southgate's England team progressed to the semi-finals at the tournament held in Russian Federation. Still, news that the economy got over its winter slump is likely to reassure Bank of England policymakers who last week raised interest rates to a new post-financial crisis high of 0.75 percent despite concerns about the approach of Brexit. Britain's government has yet to agree a divorce deal with Brussels and has stepped up planning for the possibility of leaving the bloc without any formal agreement.

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The ONS said the latest figures show "a continuation of the positive growth seen in the three months to May", making the most recent three-month growth rate comparable to growth rates through 2017.

On Friday department store chain House of Fraser was bought from its administrators The ONS said business investment expanded 0.5 percent quarter-on-quarter, barely outweighing a 0.4 percent drop in the first quarter.

Data released by the ONS also showed a 0.3 per cent rise in household spending, though employee pay growth slowed to 0.6 per cent from 1.1 per cent in the first quarter, due to weaker growth in wages.

"Indeed a rather less than encouraging assessment of the UK's economic prospects can be found in the performance of the pound, which has slipped back below $1.30 against the dollar in the last week, despite a rise in United Kingdom interest rates".

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