The British economy grew 0.2% in this year’s second quarter as household spending remained strong despite rising consumer prices, said the Office for National Statistics.
Economists polled by the Reuters News Agency had expected Gross Domestic Product (GDP) in the United Kingdom (U.K.) to be flat in Q2 after posting surprise growth of 0.1% in the first quarter.
However, the economy expanded by 0.5% in June, beating a forecast of 0.2% growth. That followed monthly GDP growth of 0.1% in May and 0.2% in April.
Economic activity in Q2 was boosted by 1.6% growth in manufacturing, a 0.7% gain in production, and a 0.1% rise in services.
The Office for National Statistics noted strong growth in household consumption as being the main driver of economic growth in this year’s second quarter.
In May of this year, the Bank of England dropped its outlook for a U.K. recession. In its most recent monetary policy report, the central bank said it expects quarterly GDP growth to remain around 0.2% in the near term.
The Bank of England raised interest rates by a quarter of a percentage point to 5.25% earlier in August, and policymakers will be monitoring the latest GDP figures ahead of the bank’s next decision on interest rates in September.
U.K. inflation remains among the highest of all developed countries at 7.9%, well above the Bank of England’s target of 2%.
