After a weak start to the year with economic growth coming to a standstill, the UK’s economy expanded by more than forecast in July.
Economic growth was 0.3% in July, exceeding estimates following a flat quarter, which will be welcome news following the 0.2% contraction experienced between April and June.
Figures from the ONS revealed today that services, manufacturing and construction all rebounded in July from the previous month.
In July, the UK’s important service sector grew by 0.3% compared with 0% in June, an important economic indicator as the service sector accounts for around 80% of the UK’s economic output.
Manufacturing also expanded 0.3%, while construction was up 0.5% showing a strong performance for July after contracting by 0.7% in June.
Overall, GDP expanded 0.3% which was better than May (0.2%) and June (0.0%) combined.
The latest figures suggest a recession in the UK is unlikely as two consecutive quarters of contraction would be needed to confirm a recession in the economy.
With Brexit approaching in October, and uncertainty surrounding the UK’s departure date, it is possible that stockpiling may give a slight boost to economic growth over the coming weeks.
The news supported the pound which at at the time of writing was hovering at 1.12 vs the euro.