The UK economy grew by just 0.2% between April and June after feeling the impact of several "special events", the Office for National Statistics (ONS) has said.Production output fell heavily over the period, while the manufacturing, construction and service sectors managed only modest expansion.
According to the ONS, the weak GDP growth was influenced by one-off factors such as the Royal Wedding, Olympic ticket sales, record warm weather in April and the Japanese tsunami.
The ONS estimated the impact of these effects knocked as much as half of one percent off the GDP figure.
However, it admitted: "There can be no certainty as to the impact of the special events and there may be other factors at play."
In the first three months of the year, UK GDP grew by 0.5% - but this reversed a fall of the same size in the final three months of 2010.
The Chancellor George Osborne described the 0.2% as "positive news" and a sign of the UK's economic stability in a time of global uncertainty.
"We see there's underlying growth in the economy, and that is creating jobs," he said.
Sky's business correspondent Dharshini David said the growth figure, weak though it was, may take some immediate pressure off Mr Osborne.
"On the one hand, 0.2% isn't great, but the economy hasn't quite ground to a halt," she said.
But she went on: "On the other hand, even with a bounce back later this year, it's increasingly difficult to see how the official 1.7% annual growth target is going to be met."
The Office for Budget Responsibility - the Government's tax and spending watchdog - had projected GDP growth of 0.4% for the second quarter.
However, many City economists have cut their GDP forecasts recently because of mixed manufacturing, services and construction figures.
According to the ONS, the weak GDP growth was influenced by one-off factors such as the Royal Wedding, Olympic ticket sales, record warm weather in April and the Japanese tsunami.
The ONS estimated the impact of these effects knocked as much as half of one percent off the GDP figure.
However, it admitted: "There can be no certainty as to the impact of the special events and there may be other factors at play."
In the first three months of the year, UK GDP grew by 0.5% - but this reversed a fall of the same size in the final three months of 2010.
"We see there's underlying growth in the economy, and that is creating jobs," he said.
Sky's business correspondent Dharshini David said the growth figure, weak though it was, may take some immediate pressure off Mr Osborne.
"On the one hand, 0.2% isn't great, but the economy hasn't quite ground to a halt," she said.
But she went on: "On the other hand, even with a bounce back later this year, it's increasingly difficult to see how the official 1.7% annual growth target is going to be met."
The Office for Budget Responsibility - the Government's tax and spending watchdog - had projected GDP growth of 0.4% for the second quarter.
However, many City economists have cut their GDP forecasts recently because of mixed manufacturing, services and construction figures.
No comments:
Post a Comment