UK Q2 GDP Annual Growth Confirmed at 1-Year Low


The British economy grew 1.7 percent year-on-year in the second quarter of 2017, unrevised from the preliminary estimate and following a 2 percent expansion in the previous period. It was the lowest annual growth rate since the second quarter of last year, as household spending rose at softer pace while business investment stalled.

On the expenditure side, household expenditure growth eased to 2 percent from 2.6 percent in Q1; and business investment stalled after an increase of 0.7 percent in the previous period. Still, overall gross fixed capital formation went up at a faster 2.5 percent (2 percent in Q1) and government spending grew by 1.2 percent (0.8 percent in Q1).

Imports jumped 3.7 percent, following a 3.3 percent gain in Q1; while exports rose at a slower 2.4 percent, after rising by 2.9 percent the previous period. As a result, the trade deficit widened to £13.8 billion from £11.4 billion in Q2 2016. 

On the production side, the service industries expanded 2.3 percent, the same pace as in Q1, as output rose for: Distribution, hotels and restaurants (3.5 percent, the same as in Q1); transport storage and communications (3.9 percent from 3.2 percent); business services and finance (1.9 percent from 2.4 percent); and government and other services (1.4 percent from 1.1 percent). Industrial production dropped 0.3 percent (2.3 percent in Q1), as output fell for: Electricity, gas, steam and air conditioning supply (-4.8 percent from 0.7 percent); and mining and quarrying (-0.9 percent from 1.1 percent). Meanwhile, output rose at a slower pace for: Manufacturing (0.2 percent from 2.5 percent) and water supply, sewerage, waste management and remediation activities (2 percent from 3.8 percent). Construction expansion slowed to 0.4 percent from 2.8 percent in Q1.

ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com
8/24/2017 9:33:01 AM