UK GDP Grows Stronger Than Expected


The UK economy expanded 0.9 percent in the second quarter of 2014, up 0.1 percentage points from the second estimate, mainly due to changes in the GDP calculating methods. Figures for the first quarter were also revised to a 0.7 percent expansion, from a 0.8 percent increase previously reported.

To meet international standards, the new GDP estimates have moved from the European System of Accounts 1995 (ESA95) to the European System of Accounts 2010 (ESA 2010). The new measure takes into account activities such as research and development spending and expenditure on weapon systems that were not included before.

In the three months to June 2014, household final consumption expenditure increased for the twelfth consecutive quarter, growing by 0.6 percent. The largest increases in household final consumption expenditure came from miscellaneous goods and services. Non-profit institutions serving households final consumption expenditure rose by 1.3 percent in Q2 2014 and follows a 0.4 percent increase in Q1 2014

Government final consumption expenditure increased by 1.0 percent in Q2 2014 following a 0.3 percent fall in Q1 2014.

There is also continued growth in gross fixed capital formation which rose by 1.3 percent in Q2 2014, the seventh consecutive quarterly increase. Within gross fixed capital formation, business investment increased by 3.3 percent between Q1 2014 and Q2 2014. This follows a 0.9 percent increase in Q1 2014.

The trade balance deficit increased from £8.7 billion in Q1 2014 to £8.9 billion in Q2 2014. Exports fell by 0.4 percent in Q2 2014 as in Q1 2014, while imports fell by 0.3 percent in Q2 2014 following a 2.0 percent fall in Q1 2014.

Year-on-year, the economy advanced 3.2 percent in the April to June period, unchanged from the second estimate.  

UK GDP Grows Stronger Than Expected


ONS | Joana Taborda | joana.taborda@tradingeconomics.com
9/30/2014 12:47:40 PM