12.08.202106:36:00UTC+00UK Economy Recovers In Q2

The UK economy recovered strongly in the second quarter, following the easing of coronavirus restrictions, the first quarterly estimates from the Office for National Statistics showed on Thursday.

Gross domestic product grew 4.8 percent sequentially in the second quarter, reversing a 1.6 percent fall in the first quarter. The rate matched economists' expectations.

Nonetheless, the level of GDP was 4.4 percent below its pre-pandemic level.

In June, GDP growth improved to 1 percent from 0.6 percent in May. This was faster than the economists' forecast of 0.8 percent and marked the fifth consecutive month of growth.

On the production-side, services continued to be the main contributor to GDP's recovery in June 2021, growing 1.5 percent in June, following a revised 0.7 percent growth in May.

Production output fell 0.7 percent in June, as planned temporary closures for maintenance of oil field production sites once again hit output. At the same time, manufacturing output rose 0.2 percent, after rising 0.1 percent in May.

Construction output contracted for a third consecutive month, with output down by 1.3 percent in June.

Data revealed that business investment increased 2.4 percent in the second quarter, though it was still 15.3 percent below its pre-pandemic levels.

Another report from the ONS showed that the visible trade gap widened to GBP 11.98 billion in June from GBP 9.6 billion in May. At the same time, the trade in services logged a surplus of GBP 9.47 billion, slightly up from GBP 9.44 billion in the prior month.

As a result, total trade balance posted a shortfall of GBP 2.5 billion in June versus -GBP 163 million a month ago.