Investments  

GDP grows by 0.6 per cent in the second quarter

Gross domestic product grew by 0.6 per cent in the three months to June, compared with a year earlier, following a string of positive economic news out of the UK.

The estimate, which was in line with market expectations, marks double the rate of growth in the first quarter of 2013 and follows high consumer confidence, low company default rates, and improving manufacturing and service data.

An expansion in services in particular was a key driver, the Office for National Statistics said, contributing approximately 0.48 percentage points to the growth figure.

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All four main industrial groupings within the economy - agriculture, production, construction and services - increased in Q2 2013 compared with Q1 2013, the ONS said.

Ian Kernohan, economist at Royal London Asset Management, said the growth figure was “not an unexpected result” given the strength of recent data.

“The debate will now move on from a misplaced obsession with so-called double and triple dips, to whether the weakest recovery on record is finally gathering pace,” he said.

“Stronger data from Europe will add to the sense that the UK economy has finally turned a corner, although the new governor of the Bank of England [Mark Carney] will be keen to stress that a rise in interest rates is still a long way off, in order to allow time for the recovery to gain traction.”

Gross domestic product is the market value of all the goods and services produced by a region within a selected timeframe.