ONS figures show surprise acceleration in UK economic growth
Figures from the Office for National Statistics (ONS) show that the UK economy grew by 0.6% in the second quarter of 2016 – significantly more than expected in the run-up to the EU referendum.
Many analysts expected growth to be slower due to the uncertainty surrounding Brexit, but the period between April and June saw the biggest jump in quarterly industrial output since 1999, with growth of 2.1%.
Construction output, however, fell by 0.4% – down from a 0.3% decline in the first quarter.
Overall, growth proved to be strongest in April.
Chancellor Philip Hammond said that the Gross Domestic Product (GDP) figures ‘show that the fundamentals of the British economy are strong... so it is clear we enter our negotiations to leave the EU from a position of economic strength’.
He continued: ‘Those negotiations will signal the beginning of a period of adjustment, but I am confident we have the tools to manage the challenges ahead, and, along with the Bank of England, this Government will take whatever action is necessary to support our economy and maintain business and consumer confidence.’
The ONS stressed that the GDP figure was an initial estimate and is subject to revision.
In recent days, several indicators have suggested post-referendum difficulties for the economy. A flash survey of purchasing managers suggested economic growth had fallen at its fastest rate since the financial crisis, while a survey by the Confederation of British Industry (CBI) suggested that retail sales had fallen significantly in July.
However, pharmaceutical giant GlaxoSmithKline announced that it is to invest £275 million to expand its UK manufacturing sites, stating that the country remains ‘an attractive location’ despite Brexit.