UK Economy Expands On Services Output In Q2
26 Juillet 2017 - 10:38AM
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The UK economy expanded in the second quarter on services
output, but the pace of overall growth remained weak, preliminary
data published by the Office for National Statistics showed
Wednesday.
Gross domestic product climbed 0.3 percent sequentially,
slightly faster than the 0.2 percent expansion seen in the first
three months of the year. The quarterly growth came in line with
expectations.
Darren Morgan, head of GDP at the ONS, said the economy
experienced a notable slowdown in the first half of this year.
The preliminary estimate is based on 45 percent of final data,
leaving space for revisions.
Second quarter growth was driven by the dominant service sector,
while construction and manufacturing exerted the largest downward
pulls.
Services output grew 0.5 percent from the prior quarter, when it
edged up only 0.1 percent. Likewise, farm output grew moderately by
0.6 percent, following a 0.1 percent rise.
Meanwhile, production declined 0.4 percent, contributing a
negative 0.06 percentage points to GDP. Within production,
manufacturing contracted 0.5 percent due to a large fall in auto
production.
At the same time, construction shrank 0.9 percent in the second
quarter, reversing the first quarter's 1.1 percent expansion.
On a yearly basis, the economy expanded 1.7 percent in the
second quarter, the slowest in a year, versus 2 percent in the
first quarter.
The fact that growth remained sluggish in the second quarter is
another reason to think that policymakers will take a cautious
approach at its meeting next week, Capital Economics economist Paul
Hollingsworth said.
Data supports the assessment that interest rates will remain on
hold until around the second quarter of next year, he added.
Earlier this week, the downgraded its UK outlook for 2017 citing
weaker-than-expected activity in the first quarter. The economy is
now forecast to grow 1.7 percent in 2017 and 1.5 percent in
2018.
Another report from the ONS showed that services output
increased 0.2 percent in May from April. Year-on-year, services
output grew 2.4 percent.
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