The UK economy grew as previously estimated in the second quarter, the Office for National Statistics said Friday. Nonetheless, past data on the national accounts and balance of payments were revised.
Gross domestic product grew 0.3 percent sequentially in the second quarter, unrevised from the second estimate published on August 24, and the same rate as seen in the first quarter.
The first quarter growth was revised up from 0.2 percent.
Production-side breakdown of GDP showed that services alone provided positive contribution to growth, with output rising 0.4 percent, ONS said.
Production slid 0.3 percent and construction shrank 0.5 percent. Agriculture output dropped slightly by 0.1 percent.
Although the quarterly growth was confirmed at 0.3 percent, the composition was more encouraging, Paul Hollingsworth, an economist at Capital Economics, said.
On the expenditure side, household spending grew revised 0.2 percent, the weakest growth since the fourth quarter of 2014. At the same time, government expenditure gained only 0.1 percent.
Gross fixed capital formation climbed 0.6 percent. Within this, business investment rose revised 0.5 percent. The sectors that contributed the most to GFCF were general government and business investment.
In the second quarter, net trade provided the largest contribution to growth at 0.4 percentage points.
ONS said households saving ratio has been on a declining trend since the third quarter of 2015 before recovering to 5.4 percent in the second quarter of 2017.
This suggests that households have further scope to reduce saving to help smooth spending as their real incomes are squeezed by higher inflation, thereby limiting the extent of any slowdown in consumer spending growth, Hollingsworth, Capital Economics’ economist, said.
The annual GDP growth rate for the second quarter was revised down to 1.5 percent from 1.7 percent.
In July, services output contracted 0.2 percent on month, ONS said in a separate communique. In three months to July, services output increased 0.5 percent.
In an another report, ONS said the current account deficit widened to GBP 23.2 billion from GBP 22.3 billion in the first quarter.
Source: RTT News