UK Second-Quarter Growth increase at 0.7%

The initial figure released in July was boosted by a sharp rise in oil and gas production.

As expected, the Office for National Statistics (ONS) on Friday made no change to the reading for the three months to June.

 

It was higher than the 0.4% growth recorded for the first quarter of the year.

Net trade boosted GDP by one percentage point in the second quarter - the biggest contribution from trade in four years - as exports jumped.

Economists have said the boost to trade might be temporary, because the persistent strength of sterling is making British goods more expensive abroad, while turmoil in Chinese financial markets has increased uncertainty about the global outlook.

Business investment rose 2.9% compared with the first three months of 2015 - the highest figure in a year.

Samuel Tombs, senior UK economist at Capital Economics, said the figure "put paid to the idea that uncertainty about the general election would weigh on capital expenditure".

Household spending increased by 0.7%, but was lower than the 0.9% rise in the first quarter.

Weak inflation, low interest rates and a strong pound have helped to keep consumer sentiment buoyant.

The UK economy expanded by 3% last year in its best result since 2006. The Bank of England expects the same momentum to be maintained this year, forecasting 2.8% growth.

"With growth in households' real incomes set to remain supported by low inflation, building wage growth and strong job creation, we continue to think that the economic recovery will sustain its current pace in the second half of 2015," Mr Tombs said. 

On Thursday, US GDP for the second quarter was revised sharply higher at an annualised rate of 3.7%, up from the first estimate of 2.3%. Growth of 0.6% in the first three months of the year was not revised.