Hot summer gives boost to UK economy

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The UK economy grew by 0.7% in the three months to August, buoyed by the hot summer, the Office for National Statistics said.

But the ONS said that in August, GDP growth was flat. Economists had predicted 0.1% growth.

The three-month measure was the fastest pace of growth since February 2017, economists said.

The ONS’s head of GDP, Rob Kent-Smith, said the economy had “continued to rebound strongly after a weak spring”.

He said “retail, food and drink production and house building all performing particularly well during the hot summer months”.

“However, long-term growth continues to lag behind its historical trend,” Mr Kent-Smith added.

The ONS has introduced monthly measures of GDP and provides three-month rolling growth figures rather than the quarterly figures it published in the past.

Data last month had shown the economy grew by 0.3% in July. This was revised up to 0.4%, as was the figure for June to 0.2%, which meant the three-month rolling figure to July was revised up from 0.6% to 0.7% – the same as the three months to August.

Andrew Wishart, UK economist at Capital Economists, said the three-month 0.7% figure was higher than the 0.6% expected because of upward revisions to earlier data.

“Rolling three-month growth in the services and construction sectors eased compared to July, but this was offset by industrial production recovering from its recent contraction,” Mr Wishart said.

The ONS said that growth was picking up from April, when data for the first quarter of the year was showing the weakest growth since 2012, only partly because of the cold weather.

The UK then had a heatwave, which the ONS has said helped to fuel growth in the retail sector.

Taking a longer-term view, the ONS said growth in the services sector – which makes up 80% of the economy – was subdued when compared with the same three months a year earlier.

Lee Hopley, chief economist at EEF, the manufacturers’ organisation, said: “The main takeaway from today’s bumper crop of releases on the economy is that the UK saw a spurt of activity in June and July not seen since the end of 2016. Beyond that, it seems that it’s back to business as usual more or less in August.

“The underlying services picture looks to be slow and steady, the construction sector has recovered its weather-related losses from earlier in the year and manufacturing weakness is persisting in the second half of this year so far,” Ms Hopley said.

Hot summer gives boost to UK economy

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