Services sector drags UK economy to 2.6% year-on-year growth

Services sector drags UK economy to 2.6% year-on-year growth

The UK economy grew by 0.7 per cent in the second quarter of 2015, driven largely by an expansion in the services sector.

The expansion of 0.7 per cent was in line with expectations and represented an improvement from the 0.4 per cent growth recorded in the first quarter.

The data, from the Office for National Statistics (ONS), showed the services sector grew by 0.7 per cent between April and June, while construction output was flat and manufacturing output fell.

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On a year-on-year basis, the ONS said the UK economy had grown by 2.6 per cent compared to the end of the second quarter in 2014.

The figure was only the ONS’s initial estimate, with less than half of the available data on economic growth having been examined.

However, Vicky Redwood, chief UK economist at Capital Economics, suggested the data showed “the economic recovery got back on track after its slowdown in the first quarter”.

Ms Redwood said although the dominance of the services sector meant “growth remains very unbalanced”, she pointed to a continued pick up in productivity growth as a signal of the robustness of the recovery.