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UK GDP grows 0.4% quarter-on-quarter after June rebound

The report showed June monthly growth of 0.3% after a flat reading, while annual growth accelerated to 1.2% from 0.9%.

Reported · Written up by our desk · Major Pairs

UK GDP expanded 0.4% quarter-on-quarter in the second quarter, following 0.6% growth in Q1 and matching expectations, according to data discussed by Action Forex. Annual growth picked up to 1.2%, up from 0.9%, beating the 1.1% consensus.

The breakdown was uneven, with services rising 0.5% quarter-on-quarter and construction up 0.3%, while production was flat. In contrast, manufacturing weakened further, with growth moving from a revised -0.2% to -0.5%, reinforcing concerns about divergence across the economy.

The release included a brighter June reading, with GDP rebounding from 0.0% to 0.3% month-on-month, versus expectations for a 0.1% decline. Action Forex said the stronger June growth suggests a firmer handoff into Q3, though the gains were concentrated in services, and weakness in manufacturing argues against calling the recovery broadly based.

For Bank of England policymakers, the resilience in headline activity may offer some extra room to stay focused on inflation, but GDP data alone is unlikely to materially change the near term policy stance, the outlet added.

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