Economy in malaise as second-quarter growth unchanged

Britain’s economy grew by just 0.3 per cent in the second quarter, it was confirmed yesterday, as household spending slumped to its lowest level in nearly three years.

Releasing its second estimate of growth for April to June, the Office for National Statistics (ONS) said gross domestic product (GDP) expanded by 0.3 per cent, up from 0.2 per cent during the first three months of the year but in line with its previous Q2 reading.

It means the UK is likely to have recorded the slowest second-quarter growth out of the G7 group of nations.

The said the amount of money spent by British households grew by just 0.1 per cent in the second quarter, down from 0.4 per cent for the first three months of the year.

Howard Archer, chief economic advisor to think-tank the EY Item Club, said the economy was “stuck in low gear” in the second quarter and unlikely to accelerate in the third.

“The economy is currently showing little sign of acceleration and we expect GDP growth to be limited to 0.3 per cent quarter-on-quarter again in the third quarter,” he noted.

“Latest hard data point to ongoing consumer caution in spending with retail sales lacklustre in July. Meanwhile, survey evidence pointed to limited services activity in July and softer construction activity.”

Business investment was flat in Q2 at £43.8 billion. 0 ‘Showing little sign of acceleration’ – Howard Archer