A sharp upward revision to US second-quarter GDP yesterday sent markets around the world higher. Alas, data out of the UK was a little more muted.
Official statistics released today confirmed Britain's economy grew 0.7 per cent in the second quarter of this year. However, economists said that the underlying data shows some rebalancing in the economy towards investment and exports.
Exports showed an unexpectedly sharp rise of 3.9 per cent – despite a glut of gloomy surveys suggesting manufacturers are struggling due to the strength of the sterling, as well as a slowing global economy.
Meanwhile, business investment rose 2.9 per cent in the second quarter, which bodes well for future productivity.
"The new details published today are positive and very welcome. We saw strong growth in business investment and a large reduction in our trade deficit," David Kern, chief economist at the BCC, said.
"While the figures point to some rebalancing in the economy towards investment and exports, it is much too early to be satisfied with where we are, particularly on the trade figures."
Household spending grew by 0.7 per cent during this period, meaning it's increased for 16 consecutive quarters.
However economists warned that while exports had helped make net trade a "stand out performer", boosting overall economic growth by one percentage point, this was unlikely to last.
"Whilst the second quarter performance looks impressive, particularly against the elevated level of the exchange rate, we shouldn’t get too distracted from the view that over the medium term the second quarter performance in exports is unlikely to be sustained consistently," Sam Hill, senior UK economist at RBC capital markets, said.
The five most important figures from today's survey
1. Quarter-on-quarter growth was unchanged
Today's release shows Britain's economy grew by 0.7 per cent between April and June, unchanged from the previous estimate. Yawn.
2. … as was year-on-year growth
Between second quarter of last year and the second quarter of 2015, GDP increased by 2.6 per cent. Again, this was unrevised from the previous estimate.
3. But exports went bananas
Exports rose 3.9 per cent in the second quarter of this year, from 0.4 per cent between January and March. Meanwhile, imports increased 0.6 per cent in the second quarter, after a 2.3 per cent rise in the first quarter.
This helped net trade make its biggest contribution to GDP in four years – boosting the overall figure by a whole percentage point.
4. And business investment jumped
Business investment rose by 2.9 per cent in the second quarter, up from two per cent in the previous quarter, and also the highest in a year.
5. … and households dusted their wallets off
Household spending grew by 0.7 per cent in the second quarter of this year, meaning it's increased for 16 consecutive quarters. But this represented a slight slowdown from a reading of 0.9 per cent in the first quarter.