Britain’s recovery picked up pace in the second quarter, official figures have confirmed, with GDP expanding by 0.6% which was the expected figure, so no surprises. The 0.6% rate of growth was twice the pace of the first three months of 2013, and exactly as predicted by economists, after signs of a pickup in retail sales and strong readings in business surveys.
The Office for National Statistics said that all sectors of the economy saw growth between April and June. Both industrial production, and the key services sector, expanded by 0.6%, the ONS said, with construction – which has been a heavy drag on the economy in recent quarters – picking up by a healthier than expected 0.9% helped by incentives from the UK government.
Sterling fell back sharply against the US dollar after the release of the figures, having been above 1.5380 before the GDP announcement the pound quickly fell to 1.5330 and is currently at 1.5305. Sterling had had a very strong run from 1.48 USD to close to 1.54 USD in the last three weeks. Today’s confirmation of the GDP figures from the UK, although good that it is the first time since 2011 that the UK has seen back-to-back quarterly increases, after a 0.3 per cent rise at the beginning of this year.
The figures are still on the low side especially when compared with U.S GDP figures. The decline in Sterling soon after the announcement of the figures will probably continue and as mentioned in previous articles, Sterling should fall below 1.50 USD possibly by the end of this month.