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UK GDP Growth Continues To Gather Pace

James Boston
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UK GDP Growth Continues To Gather Pace

The strength and pace of growth in the British economy has been reconfirmed this morning with the publication of the finalised version of the second quarter Gross Domestic Product (GDP) data. Q2 growth was slightly updated from the previously announced 0.8% to 0.9%. This leaves the annualized growth number at 3.2% up from the 3.0% figure presented at the end of the first quarter.

Britain’s Current Account deficit for the second quarter however takes the shine off the impressive growth figures. The final number for the quarter now stands at -£23.1Bn, this is a problematic area of the UK’s economic recovery as it does represent a widening of the deficit from the first quarter’s -£18.495Bn. The deficit reduction trend is undoubtedly moving in the wrong direction and will need to reverse if the government’s self imposed targets are to be met.

The Total Business Investments data for the quarter is somewhat mixed, there was a pick up detected in Q2, primarily in manufacturing investment, which will need to gather more pace in order to ensure continued stability of the UK’s growth efforts. The second quarter produced a 3.3% increase in Business Investment following on from the 5.0% increase experienced in the first quarter of the year, on an annualised basis however this number is showing a less impressive 11.0% expansion, up from the previous reading of 10.6% but missing the expected target of 11.5%

There has been some evidence of cooling in the troublesome housing market according to the latest Nationwide House Price Index released this morning. The figures for September show that the year on year growth rate has slowed to 9.4% from the 11.0% experienced in August, this was expected to cool to about 10.4% this month. The seasonally adjusted month on month Nationwide HPI number contracted by -0.2% this month following the 0.8% expansion in August.

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