UK GDP Growth Data at +0.6 pct: Reactions from those qualified to comment
The ONS today reports that the UK economy grew an estimated 0.6 pct in the three months to June.
The latest GDP data shows output grew in the construction, manufacturing, services and agriculture sectors.
Here are a selection of views on the data.
John Allan, the Federation of Small Businesses’ (FSB) National Chairman, said the government must do more to cement growth:
“It is clearly welcome that the economy grew by 0.6 per cent in the second quarter and that growth was seen across all sectors. This gathering momentum fits with the results of own recent small business index, which showed firms expected faster export performance in the coming three months and that more businesses were planning to grow in the next 12 months.
“In order for to build on this momentum and for small businesses to meet their aspirations and further strengthen the economic outlook, they need a stable environment. The capital spending on projects announced by the Chancellor recently, will have a positive effect on growth in the medium-term and the employment allowance announced at the Budget may help more firms to invest in jobs. The Government should now look to further supporting UK small businesses by increasing competition in banking, enabling a better energy deal and simplifying the complex number of back to work schemes.”
Marcus Bullus, trading director of MB Capital, asks where 'escape velocity' is:
"While the Government and policymakers will declare this first estimate of second quarter GDP as a major step forward, deep down the markets will be disappointed by the rate of growth.
"Yes, it was in line with expectations. But the awkward silence of the journalists in the media conference betrayed the sense of disappointment.
"The market reaction was equally muted, and Sterling promptly dipped.
"0.6% is double what we had in the previous quarter but it still shows that the recovery is meek, not mind-blowing.
"The economy is on a stronger footing but there are still numerous challenges, not least from stubbornly high inflation and static or negative wage growth, both of which will inhibit spending.
"The Eurozone economy remains very fragile and, as our major export market, its weakness clearly threatens our own economy.
"To achieve Escape Velocity, as Governor Carney refers to it, you need a strong consumer but the UK's consumers are still feeling bruised by weak confidence and rising prices.
"There's something artificial about the current resurgence of the economy. It doesn't really correlate to economic reality. It may be more of a lurch forward after years of austerity rather than the beginning of anything sustainable."
Richard Northedge on his Director of Finance Blog says a statistical peculiarity will ensure the next quarter's growth will underwhelm:
There’s no doubt the UK economy has turned upward but the 0.6 per cent lift in gross domestic product reported for the second-quarter of 2013 is unsustainable. Third-quarter growth will be lower than that – possibly even negative again.
"An effect of the way Britain’s GDP statistics are reported is that an exceptionally bad quarter is likely to be followed by a good figure and an exceptionally good quarter is likely to be followed by bad data. And the second-quarter was so good that the performance was exceptional."
A good read - see the rest of Richard's post here.
Dr Neil Bentley, CBI Deputy Director-General says the potential to get knocked off course remains:
“The economy has performed strongly and looks to be building up a head of steam for the rest of the year.
“This confirms our view that we are heading down the road to recovery, even if there are likely to still be a few bumps ahead.
“Underlying conditions are quite weak as consumers are still saddled with debt and despite the global economy picking up, the potential for getting knocked off course remains.
“It’s critical the Government renews its efforts to secure a balanced recovery, using investment and trade as its building blocks.”