UK Growth Revised Upward Optimism About Faster Recovery Rises

Britain’s recession-scarred economy expanded more rapidly than first thought in the second quarter of the year, by 0.7%, stoking hopes that recovery is finally taking hold.

In its second estimate of growth from April to June, the Office for National Statistics said GDP grew more strongly than its first estimate, of 0.6%. The 0.7% jump was the strongest since the third quarter of last year, when the economy was boosted by the Olympics.

The upturn is also more broad-based than first thought, according to the breakdown of the data, helping to assuage fears that the UK is in an unsustainable “Alice in Wongaland” recovery, too dependent on consumer spending.

Business investment was up 0.9%, the ONS said, while household spending expanded by 0.4%. Exports rose at 3.6%, the fastest pace since late 2011.

Chris Williamson, chief economist at data provider Markit, said: “Importantly, the upturn was not simply fueled by surging spending by households. Instead, exports and business investment were key drivers of the expansion, pointing to a rebalancing of the economy away from domestic consumption.”

The Treasury, which is hoping a full-blown recovery is under way, after almost two years of weakness, seized on the widespread nature of recovery.

via The Guardian

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