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UK Economy Remains On Track

  • 31/08/2017
  • Jane Bray

According to official figures released earlier this month, the UK economy grew in line with expectations in the second three months of the year.

The Office for National Statistics (ONS) reported that Britain's GDP grew by 0.3% on a quarterly basis in the three months to the end of June. This in line with the first estimate released last month, which analysts expected to remain unchanged.

The figure was higher than the 0.2% gain recorded in the first quarter. But this still leaves Britain having the slowest growth rate of all G7 countries for two consecutive quarters.

Meanwhile, on a year-on-year basis Britain's economy expanded 1.7% in the second quarter, down from the 2% reading recorded in the previous three months, but matching analysts' expectations and last month's reading.

The services sector that grew by 0.5% in the second quarter from the previous three months, was the main driver of growth and there was also relatively strong growth in government spending and investment.

There was however a slowdown in business investment in the second quarter. "One would expect business to be cautious ahead of the Brexit negotiations, however, the fact that capital investment is stronger than expected is good news, and suggests that some investors are willing to look through Brexit to our future outside of the EU," said Kathleen Brooks, research director at City Index.

Last month, the International Monetary Fund said it expects the UK economy to grow by 1.7% this year, in comparison with the 2% it forecast in April, while growth forecast for 2018 remains unchanged at 1.5%.

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