"While an improvement on the first quarter, growth in the British economy was subdued as businesses put spending decisions on hold."
The ONS says that its second quarterly estimate of GDP based on additional data provides a more precise indication of economic growth.
This is the 14th consecutive quarter of positive growth since Quarter 1 2013.
Between Q2 2015 and Q2 2016, GDP in volume terms increased by 2.2%, unrevised from the previously published estimate.
GDP in current prices increased by 1.6% between Q1 and Q2.
Nancy Curtin, Chief Investment Officer of Close Brothers Asset Management, commented: “While an improvement on the first quarter, growth in the British economy was subdued as businesses put spending decisions on hold. With the post-referendum picture not yet clear cut, investors will be watching economic data more closely than ever in the coming months. However, better than expected July retail and jobs data suggests that the “Brexit” bogeyman isn’t quite as scary as once thought, with consumer spending robust, and lower sterling supporting exports and industrial production. But, it’s by no means a completely positive picture. Services PMIs provide less encouraging reading, suggesting a more mixed economic outlook.
“The UK economy is in the midst of a period of known ‘unknowns’ and it is too early to make a judgement on the likely health of the UK domestic economy over the coming years – let alone post-Brexit. In the meantime, monetary stimulus and a weaker currency will support growth. If we see the government propose a new policy of fiscal stimulus in the autumn, it will be a key buffer against Brexit-related fallout.”
Jonathan Chitty, Investment Analyst at Brown Shipley, added: “Aside from declines seen in agriculture and construction the survey illustrates that the UK economy was doing well in the second quarter, with output now around 8% higher than the pre-financial crisis peak. It is important to note, however, that the reading covers the three months to 30 June 2016, and as such provides us with little colour on how the UK is performing post-referendum. In short, the UK was open for business in the second quarter, but whether this continues later in the year remains to be seen.”
