- Scott Bowman, Capital Economics
The UK economy grew more than expected in the Q2, despite the country's decision to leave the European Union, official data showed on Friday.
According to the Office for National Statistics (ONS), the UK GDP advanced 0.6% during the reported period, compared to the preceding quarter's 0.5% rise. On an annual basis, GDP expanded 2.2% in the Q2 of 2016. Both reading came in line with analysts' expectations. The data also showed that services and production jumped 0.5% and 2.1%, respectively in the Q2. In Contrast, construction dropped 0.4%, whereas agriculture fell 1.0%. Furthermore, household consumption increased 0.9% over the Q2, rising for 6 consecutive quarters. Year-over-year, household consumption climbed 3.0% in the reported quarter. Government spending declined 0.2% on a quarterly basis, but increased 0.8% on a yearly basis. Investment was the largest component of Britain's GDP in the Q2, growing 1.4% quarter-over-quarter and 0.9% year-over-year.
Despite promising UK retail sales figures and the lowest unemployment rate since June 2008, the Brexit vote negatively affected business and consumer confidence, as the manufacturing activity gauge fell to the lowest level since 2013 and the services activity dropped to its lowest level since 2009.
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