Prior +0.3%GDP Y/Y +1.6% vs +1.0% expectedPrior +1.1%Full report here
The UK economy maintained its recent pace of growth in the three months to July, with real GDP rising 0.4% compared with the three months to April. The increase marks the eighth consecutive three-month period of growth, although momentum has eased from the 0.6% expansion recorded in the three months to May.
Services remained the main driver of growth, with output increasing 0.6% over the three-month period. In contrast, production and construction both contracted by 0.5%.
The monthly figures were more encouraging. UK GDP grew 0.4% in July, accelerating from 0.3% in June and no growth in May. Growth was broad-based, with services output rising 0.4%, production increasing 0.2% and construction growing 0.1%.
On an annual basis, GDP was 1.6% higher in July than a year earlier. Over the three months to July, GDP increased 1.3% year-on-year, with services up 1.7% and production up 0.5%. Construction, however, remained weak falling 2.3% from a year earlier.
The much stronger than expected July reading shows that the UK economy is retaining momentum despite recent headwinds stemming from increased borrowing costs and higher energy prices. Overall, the data suggests growth remains resilient and that should keep the tightening bias for the BoE intact, especially after the recent surge in oil prices.
This article was written by Giuseppe Dellamotta at investinglive.com.