UK enjoys best pace of expansion in over six years as economy continues to grow

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%, its best performance in more than six years.

Official data yesterday showed that GDP expanded by 0.8% in the April-June period, the same pace as in the first three months of the year.

Compared with the second quarter of last year, the UK economy expanded by 3.2%, up slightly from an estimate of 3.1% in the preliminary reading.

That was the fastest annual growth since the end of 2007, Britain’s Office for National Statistics 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 office said.

The data also confirmed that the economy was 0.2% bigger than in the first quarter of 2008, its previous peak before the financial crisis.

It did not give a breakdown of the spending which drove economic growth as it normally does when it issues its second reading of GDP. The office is changing its methodology for calculating GDP and will provide those details at the end of September.

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 weak in recent months.

The office confirmed that the dominant services sector was once again the main driver of the economy between April and June, expanding by 1% for the fastest quarterly growth since the third quarter of 2012.

In June alone, the services sector expanded by 0.3% from May and by 3.6% year-on-year — its fastest annual growth rate since early 2008.

Manufacturing edged up just 0.2% in the quarter, marking 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%. It remained the first time that the sector has not grown since the start of 2013.

Reuters