UK economy seen doubling pace of growth in second quarter

The future is looking better for British manufacturers as well, with orders books in July at their strongest so far this year, according to a long-running survey by the Confederation of British Industry.
The ONS’s preliminary estimates of GDP are among the first released in the European Union, and are based partly on estimated data. On average, they are revised by 0.1 percentage points up or down by the time a second revision is published two months later, but bigger moves are not uncommon.
That would be twice the pace of growth in the first three months of the year. The revival in the British economy contrasts with the rest of Europe, where many countries are struggling to grow or are stuck in recession.
New Bank of England chief Mark Carney will welcome signs that Britain’s economy is edging closer to what he has termed “escape velocity”, or sustainable growth.
But he is still likely to judge that it needs extra help to get there, especially with the country’s key trading partners in the euro zone in such weak shape.
Official statistics, covering only part of the period, have been more mixed, with broadly flat industrial and construction output and a stronger service sector.
Upbeat company news this week has reinforced the sense of an economy on the mend.
Pub chain JD Wetherspoon said it would speed up new pub openings next year, helped by a better mood among customers, while developer British Land has invested 512 million pounds in property acquisitions since April.
The Bank under Carney is widely expected to start providing detailed guidance from next month on how long interest rates will remain low, in an effort to encourage consumers to spend and businesses to borrow and invest.
Some analysts thought growth in the second quarter would be as strong as 0.8 percent after a string of buoyant surveys recently, such as polls of purchasing managers.
Compared with a year earlier, the rate of growth is expected to have jumped to 1.4 percent from 0.3 percent in the first quarter. That would be the fastest increase since early 2011.
“We are predicting that all four headline sectors of the economy – services, industry, construction and agriculture – expanded during Q2, which would be the first time that this has occurred since Q3 2010,” said economists at Investec.
Consumers, a key engine of Britain’s economy, are perking up too. They are more optimistic on the economy than at any time since April 2010, as measured by a new consumer confidence index by market researchers YouGov and the Centre for Economics and Business Research.
Britain’s economy probably expanded faster in the second quarter than in the first, helped by growing confidence among consumers and by signs that companies are ready to borrow and spend more.
Official statistics due out at 0930 BST on Thursday are expected to show that growth came to 0.6 percent in the April-to-June period compared with the previous quarter, according to a Reuters poll of economists.