UK economy at cruising speed entering Brexit storm
Simon Ward
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Data this week confirm that the UK economy was growing solidly before the EU referendum, in line with the positive assessment in previous posts here but contrary to consensus gloom.
Revised figures show that GDP grew by 0.45% in the first quarter, up from a previous estimate of 0.36%. The consensus had expected a sharp slowdown, or even stagnation, in the second quarter. Output of the key services sector, however, increased significantly in April (as had been suggested by turnover data), to stand 0.5% above its first-quarter average.
With previously-released data showing large gains in industrial and construction output, April GDP is estimated to have grown by 0.6% from its first-quarter level.
The April numbers were probably flattered by the early timing of Easter, suggesting a relapse in May / June. On current evidence, however, the first estimate of second-quarter GDP growth to be released on 27 July is unlikely to be less than 0.4%.
The Markit manufacturing purchasing managers’ survey for June, meanwhile, was upbeat, with the forward-looking new orders component at its strongest level since October.
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