UK growth to its most sustained pace in 9 years
August 28, 2010 – 4:05 amThe growth of the British economy in the second quarter was revised up, the country with even its strongest pace of growth in over nine years, according to data released Friday by the Office for National Statistics (ONS), but Analysts doubt that this improvement continues.
The gross domestic product (GDP) in Britain rose 1.2% in the second quarter thanks to stronger than expected performance in the construction sector, whereas it was estimated up 1.1% first estimate.
This GDP growth is much higher than in the first quarter of 2010, when it exited at +0.3%.
Yoy, Britain's domestic production rose 1.7% instead of rising 1.6% announced in the first estimate.
The revised figures from the NSO, published recently, showed that the construction sector could add 0.1 percentage points to GDP.
FREE MARKET REACTION
"We already knew that the figures in the construction sector had been revised so it's not a big surprise. There is a stronger than expected growth in consumption, but business investment has weakened further. I think table will be different in two years.The important point is that we should not expect that such a growth rate continues, "said Richard Barwell, of RBS.
The foreign exchange market and the bond market had little reaction to the publication of these figures, investor attention is focused more on the U.S. GDP numbers expected at 1230 GMT and the speech of Fed Chairman at 14:00 GMT.
Household spending rose 0.7% on quarter and by 1.0% over the year, their largest increase since the first quarter of 2008, after declining 0.1% in the first quarter of 2010.
For the moment, nothing allows us to anticipate a slowdown in the third quarter as retail sales are booming and that industrial orders show a rebound.The services PMI was recorded in July but this month the slowest growth in 13 months.
The second quarter growth was also driven by an increase in business inventories for the first time since the third quarter of 2008.
However, growth in the services sector was revised downward to 0.7%, against an initial estimate of 0.9%, due to disruptions that have affected the aviation sector in April and May
Public expenditures have also fallen sharply in the second quarter to 0.3% against 1.5% in the first three months of the year.
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