Finance News

GDP rises to 0.4% in Q2

Rozi Jones
|
10th August 2018
London city finance skyline
"The Bank of England may have been slightly nervous about this data release because poor numbers would have put a spotlight on their decision to raise rates last week."

UK GDP grew by 0.4% in Q2 2018, picking up from growth of 0.2% in Q1, according to the first estimates from the ONS.

Three-month growth continued to recover from flat growth seen in the three months to April 2018, which the ONS attributed to the bad weather at the start of the year.

Rolling three-month growth increased by 0.4%, up from 0.1% in the three months to May.

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.

However it admitted that growth over the first half of the year "remained modest by historical standards".

Head of national accounts at thet ONS, Rob-Kent Smith, said: “The economy picked up a little in the second quarter with both retail sales and construction helped by the good weather and rebounding from the effects of the snow earlier in the year. However, manufacturing continued to fall back from its high point at the end of last year and underlying growth remained modest by historical standards."

Laith Khalaf, senior analyst at Hargreaves Lansdown, said the Bank of England will be relieved at the figures, avoiding 'egg on its face' after its decision to raise interest rates last week.

Rob Hodgson, head of wealth management at GWM Investment Management, agreed that "the Bank of England may have been slightly nervous about this data release because poor numbers would have put a spotlight on their decision to raise rates last week".

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