World Cup success and warm weather boosts UK economic growth
The UK economy grew more strongly than expected in July as the heatwave and World Cup boosted the retail sector. The Office for National Statistics said the economy grew by 0.3% in July, and by 0.6% over the three months to July – the fastest pace in almost a year.
“Services grew particularly strongly, with retail sales performing well, boosted by warm weather and the World Cup,” said Rob Kent-Smith from the ONS. The construction sector expanded but industrial output contracted.
“The dominant service sector again led economic growth in the month of July with engineers, accountants and lawyers all enjoying a busy period, backed up by growth in construction, which hit another record high level,” said Mr Kent-Smith.
The 0.6% growth rate for the three months to July was at the fastest since August 2017, the ONS said, and marks a pick-up from the 0.4% rate seen in the three months to June.
The data comes ahead of the Bank of England’s monetary policy meeting on Thursday when interest rates are not expected to change. They were raised in August, for only the second time a decade, to 0.75%.
John Hawksworth, chief economist at PwC, said the latest data justified the decision to raise rates last month. However, he remained cautious due to the possible impact of Brexit.
“Looking ahead… the long hot summer could give way to a stormy autumn as Brexit-related uncertainty leads businesses to defer major investment decisions and subdued real wage growth weighs on consumer spending,” he said.