UK growth continued to disappoint in the second quarter. According to the advance estimate, UK GDP contracted by 0.7% Q/Q more than triple the expected rate (-0.2% M/M) in the April to June period. For already three quarters now, the British economy is contracting. The breakdown show that weakness was led by the construction sector (-5.2% Q/Q) and also manufacturing activity continued to decline (-1.4% Q/Q).
After growing slightly during the first three months of the year, the services sector fell back into contraction (-0.1% Q/Q) in the second quarter. Only the government sector continued to support growth (0.3% Q/Q) in the second quarter.
The ONS added that the poor performance was partly due to a working day fewer as part of the celebrations for the Queen’s Diamond Jubilee, but also the bad weather was partly responsible for the awful GDP data (construction did poor). Although those special factors will certainly have had some impact, the data remain very poor and provide further evidence that the UK economy is worse off than most had expected. More details will only be released with the second reading, to be published on the 24th of August.