UK GDP grew by 0.9% in Q2

Growth in the UK economy exceeded expectations in the second quarter with GDP hitting 0.9 per cent, according to the Office for National Statistics.

Data released today by the ONS reveals that GDP has been revised up 0.1 per cent from the previous GDP estimate of 0.8 per cent for the second quarter.

The ONS GDP data is now carried out using a new method, known as the ESA10 rules, which broadens the scope for calculating GDP growth to include areas such as research and development spending.

The latest growth figure marks the fastest growth seen in nine months with GDP 3.2 per cent higher than for the same quarter a year previous.

The ONS also highlights the recent increase in real household disposable income, which rose by 2.2 per cent during the second quarter.

However the UK’s current account deficit actually widened to 5.2 per cent of GDP in the second quarter compared to 4.7 per cent for the previous three months.

Capital Economics senior UK economist Samuel Tombs says: “Today’s significant revisions to the UK’s national accounts do not change the fundamental picture that the economy’s performance since the recession began in 2008 has been very weak by historical and international standards.”

Tombs also argues that the new methodology for calculating GDP may make the UK appear stronger than some of the other G7 nations.

He adds: “while the rise in GDP in the UK since its pre-recession peak is now the fourth (rather than fifth) strongest in the G7, this relative improvement is largely because most other G7 nations have yet to implement the new ESA10 rules.”