UK economy picks up speed

London, July 27: Britain’s economy picked up speed in the three months up to its vote to leave the European Union, data showed on Wednesday, helped by the biggest upturn in industrial production since 1999.

Sterling was little moved on the data and few in the financial markets expect the pace of growth will last into the second half of the year, with most economists saying the economy is at a high risk of recession after the country voted to leave the European Union.

Second-quarter gross domestic product beat expectations to grow by 0.6%, up from 0.4% in the first three months of the year, the Office for National Statistics said.

Output in the three months to June was 2.2% higher than a year earlier, the strongest annual growth in a year and exceeding a forecast for it to hold steady at 2.0%.

Much has been changed by the Brexit vote, however.

“The collapse in all surveys of activity and confidence undertaken since the referendum suggest GDP is on course to contract in Q3,” Pantheon Macroeconomics’ chief UK economist Samuel Tombs said.

UK retail sale falls

British retailers suffered their sharpest fall in sales in four years after last month’s vote to leave the EU, raising doubts about the ability of consumers to stave off a Brexit recession.

Official figures earlier on Wednesday showed the economy as a whole grew fairly robustly in the run-up to the vote. But most economists are expecting a sharp slowdown as businesses and consumers retrench after the referendum shock.

Reuters