Rebound forecast in economic growth figures

ECONOMIC growth in the UK is expected to have rebounded during the second quarter of the year, analysts have forecast, as new official figures are set to be released this week.

Gross domestic product (GDP) growth returned to 0.4 per cent between April and June, according to estimates by economists.

It comes after growth slumped to 0.2 per cent, amid frosty weather in the first three months of the year.

Andrew Goodwin, lead UK economist at Oxford Economics, said: “The month-on-month outturns for GDP in April and May were strong, at 0.2 per cent and 0.3 per cent respectively, largely because of a rebound after March’s snow-related disruption and a couple of very strong months for retail sales.

“But, with retail sales edging down in June, the service sector is likely to provide less impetus and ensure a weaker outturn for monthly GDP growth of around 0.1 per cent. However, this would still generate quarterly growth of 0.4 per cent for Q2 as a whole.”

Analysts at Investec are also expecting that June GDP growth will have struggled to maintain the pace seen in May, when the economy received a “double boost” from warm weather and the Royal wedding.

“Principally, the expansion in construction output is almost certain to have moderated from May’s two-year high,” Investec analysts, led by Victoria Clarke, said.

“The services sector may also have seen a more moderate pace of growth, as we have already seen in the retail sales figures.

“In contrast, we expect activity to pick up in the industrial sector.”

The Bank of England – which just days ago raised interest rates for only the second time since the financial crisis – has made predictions in line with consensus for the second quarter.