Hot summer gives boost to UK economy

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The UK restraint grew by 0.7% in the three months to August, buoyed by the hot summer, the Department for National Statistics said.

But the ONS said that in August, GDP growth was out-and-out. Economists had predicted 0.1% growth.

The three-month measure was the fastest tread of growth since February 2017, economists said.

The ONS’s head of GDP, Rob Kent-Smith, estimated the economy had «continued to rebound strongly after a weak spring».

He conjectured retail, food and drink production and house building had all performed exceptionally well during the hot summer months.

«However, long-term growth endures to lag behind its historical trend,» Mr Kent-Smith added.

The ONS has introduced monthly measures of GDP and provides three-month directory growth figures, rather than the quarterly figures it published in the career.

Andrew Wishart, UK economist at Capital Economists, said the three-month 0.7% celebrity was higher than the 0.6% expected because of upward revisions to earlier text.

Data last month had shown the economy grew by 0.3% in July. The up to the minute figures revised this up to 0.4% and the figure for June was also rectified upwards.

«Rolling three-month growth in the services and construction sectors relieved compared to July, but this was offset by industrial production recovering from its up to date contraction,» Mr Wishart said.

Analysis:

By Simon Jack, BBC business rewrite man

A three month growth rate of 0.7% looks pretty darn kind-hearted for an economy generally forecast to grow somewhere between 1% and 1.5% for the by year.

But as always, there is some salt to be pinched.

The three-month symbol continues to be flattered by a strong showing from construction in June and July, caused by a bounce-back in operation after a weather-affected beginning of the year.

Next month, June’s bright performance from production, construction and manufacturing will drop out of the coast three-month calculation.

The figures also show that the UK economy did not ripen at all in August.

Now that is not the end of the world, as it means the economy didn’t shrink after a well-founded June and July.

In summary, it looks like the UK economy is on track to extreme a pretty good third quarter, but there will be no sound of corks exploding in the Treasury.

The ONS said that growth was picking up from April, when information for the first quarter of the year was showing the weakest growth since 2012, only partly because of the stale weather.

The UK then had a heatwave, which the ONS has said helped to fuel swelling in the retail sector.

Taking a longer-term view, the ONS said growth in the employments sector — which makes up 80% of the economy — was subdued when weighed with the same three months a year earlier.

According to the ONS:

  • Monthly advance in the services sector was flat, while grew over the three months.
  • Monthly advancement in production was 0.2%, although within that, manufacturing shrank by 0.2%. Floor three months, production growth was 0.7%.
  • The construction sector shrank by 0.7% in August, but grew by 2.9% on the three-month estimation.

Lee Hopley, chief economist at EEF, the manufacturers’ organisation, said: «The main takeaway from today’s bumper crop of delivers on the economy is that the UK saw a spurt of activity in June and July not seen since the end of 2016. Beyond that, it earmarks ofs that it’s back to business as usual more or less in August.

«The underlying posts picture looks to be slow and steady, the construction sector has recovered its weather-related drubbings from earlier in the year and manufacturing weakness is persisting in the second half of this year so far,» Ms Hopley hinted.

John Hawksworth, chief economist at PwC, said the economy was on track for an annual improvement rate of 1.5%. «This is somewhat below its longer-term trend clip of around 2% and reflects the continued drag on business investment, in finicky from Brexit-related uncertainty,» he said.

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