UK GDP growth weak at 0.2% in Q2
The UK economy grew by 0.2% in the second quarter of the year, in line with economists’ estimates, the Office for National Statistics (ONS) said today.
Weaker private consumption dragged on growth, with total services output declining 0.4% compared to Q1, increasing 0.5%.
The manufacturing sector also played its part in the muted growth figure, with production decreasing by 0.3%, compared to an increase of 0.7% in the Q1.
Business services and finance were the largest contributors to growth, increasing 0.7%, up on the 0.4% increase the previous quarter.
The ONS said it cannot put their finger on what precisely was the cause for the low growth figure but stated ‘special events’ such as the Royal Wedding may have been a factor.
“It is not possible to state precisely what the net overall impact of these special events, such as the Royal Wedding might have been.
“Analysis we have carried out indicates Q2’s special events may have had a net downward impact on Q2 2011 GDP of 0.4% in the services sector and 0.1% in the production sector.”
The data will heighten fears of the country slipping back into recession.
Concerns over slow economic growth have stoked tensions in the coalition government, with business secretary Vince Cable calling for the Bank of England to initiate a fresh round of quantitative easing to kick-start growth.
Today’s figures are subject to being revised next month.
Sterling strengthened against major currencies following the release of the data, rising 0.64% against the dollar to $1.639 and erasing earlier losses against the euro.