Monday, July 26th 2010 - 03:37 UTC

Surprise rebound of the UK economy in the second quarter, 1.1%

The British economy grew by a faster-than-expected 1.1% in the second quarter of the year, according to official data. The figure - a preliminary estimate from the Office for National Statistics (ONS) - was almost double the 0.6% growth rate expected by economists.

The services sector, business and finance posted the strongest rise in three years

It was the fastest quarterly expansion since 2006, and marked a sharp pick-up in pace from the 0.3% growth of the first three months of the year. Much of the growth came from the key services sector.

Within the services sector, which accounts for about three-quarters of the UK economy, business and finance posted its strongest rise in almost three years, rising by 1.3% over the quarter.

There was a big contribution from the construction industry, which grew at its fastest pace since 1963, in part because bad weather at the start of the year meant builders were catching up on work that should have taken place then. The only sector to register a fall was transport and communications - down 0.7% on the quarter following the impact of Iceland's volcanic ash cloud in April.

The ONS said the last time the UK had growth of more 1.1% in any quarter was in 1999.

The Chancellor, George Osborne, said the figures proved his plan to cut the public sector was right. “In the Budget, I set out a plan to restore confidence in our economy by dealing with the deficit, starting this year, and to rebalance growth from the public to private sector”.

He added that the figures “show the private sector contributing all but 0.1% of the growth in the second quarter, and put beyond doubt that it was right to begin acting on the deficit now”.
 

Published in: Economy, International.

4 comments Feed

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1 jerry (#) Jul 26th, 2010 - 02:00 pm Report abuse
A plan to cut the public sector? I understand that the departure of BP chief executive Tony Hayward is so that he can cut costs and trim the work force in a new position for the British government. I suppose that the first thing will be to cut government safety and inspection personnel, as he did with BP, leading up to the Gulf oil spill!
2 harrier61 (#) Jul 26th, 2010 - 04:43 pm Report abuse
Ummm, jerry.

www.guardian.co.uk/environment/2010/jul/23/deepwater-horizon-oil-rig-alarms

Seems Transocean (American) personnel turned the rig's safety systems and alarms off so they could sleep! In the light of that, do you still want to have a pop at Tony Hayward?
3 jerry (#) Jul 26th, 2010 - 08:43 pm Report abuse
I believe it was Harry Truman who said “the buck stops here.”
4 harrier61 (#) Jul 27th, 2010 - 11:23 am Report abuse
When you're a president and commander-in-chief, maybe. But times change. It's certainly not a principle Obama practices. Always looking for someone to blame.

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