Britain’s economy kept up its strong growth in the second quarter of 2014 and its yearly pace of expansion was revised up to 3.2 per cent, its best performance in more than six years, official data showed yesterday.
Gross domestic product expanded by 0.8 per cent in the April-June period, as reported in preliminary data last month and the same pace as in the first three months of the year.
Compared with the second quarter of last year, the economy expanded by 3.2 per cent, up slightly from an estimate of 3.1 per cent in the preliminary reading.
That was the fastest yearly growth since the end of 2007, the Office for National Statistics said.
Economists in a Reuters poll had expected quarterly growth of 0.8 per cent and a yearly expansion of 3.1 per cent.
The ONS said the upward revision of the yearly growth rate was due to a performance by the construction sector that was stronger than assumed at the time of the preliminary estimate.
The data also confirmed that Britain’s economy was 0.2 per cent bigger than in the first quarter of 2008, its previous peak before the financial crisis.
The ONS did not give a breakdown of the spending which drove Britain’s economic growth as it normally does when it issues its second reading of GDP. The ONS is changing its methodology for calculating GDP and will provide those details on September 30.
Despite the strong pace of economic growth, the Bank of England this week dampened expectations of a rate hike this year. It said it was paying close attention to prospects for pay, which has been very weak in recent months.
The ONS confirmed that the dominant services sector was once again the main driver of Britain’s economy between April and June, expanding by 1 per cent for the fastest quarterly growth since the third quarter of 2012.
In June alone, the services sector expanded by 0.3 per cent from May and by 3.6 per cent compared with June of last year, its fastest annual growth rate since early 2008, the ONS said.
Manufacturing edged up just 0.2 per cent between April and June, its weakest growth rate in more than a year.
Construction output was unchanged, a better performance than the preliminary reading which showed a contraction of 0.5 per cent. It remained the first time that the sector has not grown since the start of 2013.
Only the services industry – which accounts for about 80 per cent of Britain’s economy – is now bigger than before the crisis, at 3 per cent above its previous peak. Industrial output and construction are both still more than 10 per cent smaller.