"The UK economic recovery gained momentum in the second quarter, and a further acceleration of growth looks likely in the third quarter in what's looking like an increasingly broad-based and sustainable looking upturn"
- Chris Williamson, chief economist at research firm Markit
Britain's economy accelerated in the second quarter on the back of strong consumer spending, although the economy remains fragile and vulnerable to weak trade and business investment. The Office for National Statistics said the domestic economy expanded 0.7% between the first and second quarters, unrevised from the previous estimate. On an annual basis growth, however, it was revised down to 1.3% from 1.5% due to general government revisions. Figures also showed the nation's industrial production was upwardly revised to 0.8% from 0.6%, while manufacturing activity expanded 0.9%- the fastest rate since Q3 2010. Furthermore, construction and services sectors also gained momentum during the period.
Despite strong figures, the ONS said expansion over the past 12 months was slower than initially thought. Economic output grew just 1.3% in the last year, rather than the 1.5% calculated previously. Nevertheless, analysts remained upbeat about prospects for the rest of the year, given the recent signs of strength, however mentioned the backward-looking data was a little bit disappointing. Though brighter prospects should boost investors' confidence, investment tumbled by 786 million pounds in the three months to June, hitting only 28.7 billion- the second worst reading since the depths of economic crisis in September 2009. The indicator is a major concern for the government, as they are relying on corporate spending, which in theory should drive the economy.
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