UK economic growth at 0.1% in Q2
by Kay Mitchell
The Office for National Statistics (ONS) has today announced the UK economy grew by 0.1% in the second quarter – slightly less than a previous estimate of 0.2%.
Today’s reading is the third and final one for the April to June period and third quarter figures will be available later this month.
In the meantime, the ONS also revised down growth in the first quarter from 0.5% to 0.4%.
The latest growth revisions will undoubtedly raise concern about the strength of the UK’s fragile economic recovery.
Speculation is still mounting as to whether the Bank of England will reintroduce is quantitative easing (QE) programme this month – a scheme designed to stimulate growth.
The Bank of England’s Monetary Policy Committee has commenced its two-day rate-setting meeting today and analysts are expecting interest rates to stay at the historic low of 0.5%.
However, the Bank will announce tomorrow if it will re-start its QE scheme in order to boost the economy, which is currently struggling.
In other news today, growth in the UK’s closely-watched service sector picked up in September.
The Chartered Institute of Purchasing and Supply (CIPS)/Markit purchasing managers’ index (PMI) showed a reading of 52.9, up from August’s 51.1.
The index continues to remain above the crucial 50 level, which separates growth from contraction and was also better than forecasts of 50.7.
The survey covers businesses making up around 40% of the economy, but does not include retailers or the public sector.
Meanwhile, the incoming new work index rose, while employment levels were relatively unchanged.
However, business confidence was at its weakest since March 2009 – representing a 30-month low.
Also this week, the CIPS/Markit revealed growth in the UK construction industry fell in September.
The closely-watched PMI dipped to 50.1 in September from August’s 52.6 – the figure was lower than the 51.7 expected by analysts.
Meanwhile, manufacturing activity bounced back last month. The PMI rose to 51.1 in September from August’s reading of 49.4.
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Tags: Bank of England, construction, economy, GDP, growth, Interest rates, manufacturing, Monetary Policy Committee, Office for National Statistics, ONS, PMI, quantitative easing, recovery, revised, second quarter, services sector, sluggish, uk