UK economic growth better than expected at 0.7%

23rd August 2013

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The UK’s economy grew by 0.7 per cent in the three months to June, an increase from the preliminary estimate of 0.6 per cent, according to official figures writes Philip Scott

The Office for National Statistics says the alteration is because of the result of “small upwards revisions” across a number of the main industrial groupings.

Barely months after the threat of a triple dip, a series of good economic results for the UK means business and consumer confidence is climbing as with most indicators bearing good news.

Business surveys also show that activity strengthened in the manufacturing, services and construction sectors at the start of the third quarter.

The IMF raised its 2013 economic forecast for the UK from 0.7 per cent to 0.9 per cent at the start of July, despite downgrading its outlook for global growth as a whole.

Commenting on the revision, Nancy Curtin, chief investment officer of Close Brothers Asset Management says: “A London-led recovery has spread to the regions and has driven faster growth than expected, and like the US, the UK has shown its resilience in the face of slowing global trade. A weaker currency, a fall in hourly wages and the rise of ‘zero-hours’ contracts have made Britain more competitive in the absence of an increase in productivity. But it’s the capital that’s really driving the economy with the housing market and labour market both performing far better than previously expected, which could portend well for stock market performance in the remainder of 2013. However, the question remains whether the new Governor of the Bank of England, Mark Carney, will take this opportunity to put his foot on the gas and increase QE to accelerate the UK’s progress along the road to recovery even further.

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