31st July 2015
Growth in business and professional services means UK economic growth accelerated in the three months to July, according to the CBI’s growth indicator.
Despite a strong pound affecting exports, the CBI said the outlook for the UK economy was strong for the rest of the year.
A survey by the business group showed gross domestic product grew 0.7% in the three months to July, up from 0.4% in the first quarter. The number of firms reporting a growth in the past three months, minus those seeing declines, rose from 14% to 20%.
This rebound was due to accelerating growth in the business and professional services sector but manufacturer and retailer expansion was moderate. While the strength of sterling against the euro was expected to trigger a fall in export orders over coming months, the CBI said overall growth would strengthen.
A total of 27% of firms expected business to increase in the next three months.
However, there are still global risks due to the uncertainty surrounding GReence and the unwinding of the China stock market bubble.
Anna Leach, CBI head of economic analysis, said: ‘A healthy pace of growth puts the economy on a firm footing going into the third quarter and it looks set to stay that way through the rest of this year, as low oil prices and inflation help support spending.
‘Business and professional services helped lift the economy in the previous three months as they bounced back from a temporary blip last month.
‘But the strength in sterling continues to cause headaches for exporters trying to sell inside the eurozone.’