The UK economy grew by even more than expected in the second quarter and its yearly pace of expansion was revised up to 3.2 per cent, its best performance in more than six years.
The Office for National Statistics (ONS) also confirmed that gross domestic product (GDP) grew at 0.8 per cent in the three months to the end of June and although that figure represented no change on its first estimate, the ONS said it had measured a stronger performance in the construction sector than previously calculated in its wider revisions.
It also confirmed that the services sector, which makes up more than 75 per cent of GDP, remained the main driver of Britain’s economy between April and June, expanding by 1 per cent.
This was the fastest quarterly growth since the third quarter of 2012. The data also confirmed that the economy was 0.2 per cent bigger than in the first quarter of 2008, its previous peak before the financial crisis.
However, the ONS did not give a breakdown of the spending that drove economic growth as it normally does when it issues its second reading of GDP, as the organisation is changing its methodology for calculating GDP and will provide those details at the end of September.
Despite the strong pace of growth, the Bank of England is still not likely to raise interest rates this year, as its Monetary Policy Committee (MPC) is paying close attention to wage growth, which has been very weak in recent months.
The Bank’s statement on this came after the ONS confirmed this week that wages shrank at an annual rate of 0.2 per cent in the second quarter while the main measure of inflation rose to 1.9 per cent meaning the gap between wages and price rises was widening further.