The UK economy grew by 0.3 per cent in the second quarter of 2017 as construction and manufacturing output fell, clipping the wings of a somewhat resurgent services sector.
The Q2 figure is marginally above the revised 0.2 per cent growth figure for the opening quarter of the year, but remains below the 0.5-0.7 per cent quarterly figures seen through most of 2016. The first six months of 2017 have now provided the slowest economic growth since 2013.
The Office for National Statistics (ONS) said services growth reached 0.5 per cent over the three months, up from 0.3 per cent in the first quarter.
However, this provided the only significant support to overall GDP growth. Output from the construction, manufacturing and production sectors of the economy fell over the three months, with construction dropping by 0.9 per cent.
The 0.3 per cent quarterly figure means annual GDP growth to the end of June is now 1.7 per cent, down from 2 per cent in the year to March 31.
It was in line with consensus expectations and follows estimates the Bank of England (BoE) made in its May Inflation Report. However, the ONS's initial estimate for the second quarter has relied upon services output growing 0.3 per cent in June alone, a statistics that could yet be revised downward.
This figure, combined with last week's surprise fall in inflation, has all but ended any expectation for monetary policy action at next week's BoE meeting, according to economists.
"The weak performance in the industrial sector suggests that the economy is not rebalancing towards net trade and investment, which [BoE governor] Mark Carney wants to see before raising interest rates.
"The hawks on the Monetary Policy Committee (MPC) also hoped for stronger growth in line with the 0.6 per cent or so rate implied by business surveys," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
Forecasts for the rest of the year remain mixed. Mr Tombs suggested the UK economy would not regain momentum as price increases would continue to outstrip wage inflation.
Paul Hollingworth, UK economist at Capital Economics, was more positive. He said there was a chance the ONS would revise up the Q2 figure.
"Yesterday’s CBI Industrial Trends Survey suggests that the manufacturing sector should perform better in Q3. As a result, we think there is scope for a further pick-up in growth in the second half of this year," he added.
Azad Zangana, senior European economist at Schroders, said: "We forecast some improvement in the second half of the year as inflation starts to abate, but we doubt growth will return to above trend levels for at least a year."
