Growth confirmed at 0.7pc in the second quarter as exports and business investment rise sharply.
Surging exports and strong business investment pushed up UK growth in the second quarter, as official data confirmed the economy grew by 0.7pc in the three months to June.
The second quarter expansion follows growth of 0.4pc in the first quarter and was in line with economists’ expectations.
Consumer spending rose by 0.7pc compared with the previous quarter, representing the 16th consecutive quarter of growth, while business investment grew by 2.9pc, which was much stronger than the 1.5pc expansion expected by analysts.
Exports, which dragged down growth in the first quarter, rose by 3.9pc in the period, according to the Office for National Statistics (ONS), while imports grew by 0.6pc. Net trade alone added one percentage point to growth in the second quarter, the ONS said.
Detailed data also showed stronger construction output was offset by weaker manufacturing activity. Britain’s services sector expanded by 0.7pc in the three months to June, unchanged from an initial estimate.
Economists described the more balanced composition of growth as “positive and very welcome”.
“There has been a clear improvement in the UK’s export performance since mid-2014,” said Dominic Bryant, UK economist at BNP Paribas.
However, many highlighted that the big boost to growth from net trade was unlikely to last in the coming months.
“Looking ahead, the pound’s recent appreciation and the continued weakness of demand in some export markets such as the eurozone and China suggest that net exports are not about to play a sustained role in supporting the economic recovery,” said Samuel Tombs, Uk economist at Capital Economics. “Nonetheless, with growth in households’ real incomes set to remain supported by low inflation, building wage growth and strong job creation, we continue to think that the economic recovery will sustain its current pace in the second half of 2015.”
Fears about the health of the Chinese economy rocked stock markets this week, leading some economists to push back their forecasts for UK interest rate rises. However, others said highlighted that the domestic recovery remained robust.
“Recent problems in China and global equity market turmoil could stay the Monetary Policy Committee’s hand for the next few months, but we still expect UK interest rates to rise gradually from early 2016 onwards if the domestic recovery remains on track,” said John Hawksworth, chief UK economist at PwC.
A spokesman for the Treasury said: “It’s welcome news that our economy is continuing to deliver healthy growth, with GDP rising in the second quarter of the year, supported by rising export growth and business investment over 30pc higher than at the start of the last parliament.
“This is further proof that the economic plan we’ve pursued in Britain these last five years has laid the foundations for a stronger economy, but with an uncertain global outlook we need to continue working through our long term plan to build a resilient economy.”