UK GDP growth revised up to 0.7 per cent before EU referendum

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London skyline
The UK economy grew by an impressive 0.7 per cent in the second quarter (Source: Getty)

The UK economy grew by 0.7 per cent in the three months to the end of June, the Office for National Statistics (ONS) confirmed this morning as it revised up its previous estimates.

The ONS initially thought the UK grew by 0.6 per cent in the run up the the referendum, though it now estimates the economy expanded at its joint-fastest pace since the end of 2014, defying expectations for a slowdown ahead of the EU referendum.

The stats body also reiterated its view that economic data since the 23 June vote shows "no sign of an immediate shock to the economy" as a result of the surprise Brexit vote.

The ONS said output in the UK's dominant services industry, which accounts for four-fifths of the economy, grew by a robust 0.4 per cent in July - the first full month after the referendum. Such strong performance is the latest sign that the UK looks set to avoid a post-referendum recession, although a slowdown in growth from the impressive 0.7 per cent expansion looks unavoidable.

"There is very little evidence of a slowdown in the UK economy either prior to or immediately after the Brexit referendum," said Scott Corfe, director of the Centre for Economics and Business Research (CEBR). He added: "A recession will almost certainly be avoided this year."

Howard Archer, of IHS Markit also said the surprise services figures are a "significant boost to third quarter growth prospects", as he immediately revised his estimate for growth in the three months ending today from 0.3 per cent to 0.4 per cent.

The strong figures also bring the probability of further action from the Bank of England into "question", according to Pantheon Macroeconomics' Samuel Tombs, since they had initially been expecting growth to flat-line over the final six months of the year.

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