British economic growth accelerated more than initially estimated in the second quarter, helped by construction and manufacturing and a boost from trade.
Gross domestic product increased 0.7% from the first quarter, when it rose 0.3%, the Office for National Statistics said in London today. That compared with an initial estimate of 0.6% published on July 25. Exports rose the most in more than a year and net trade contributed 0.3 percentage points to GDP.
Signs that the economy has maintained its momentum, with services, manufacturing and construction indexes all rising last month, have prompted some economists to raise their growth forecasts for this year and next. While risks to the outlook remain, Bank of England Governor Mark Carney has sought to cement the recovery by introducing forward guidance to quell investor bets on higher interest rates.
The pound traded at $1.5621 U.S. late Friday morning, up 0.2% from yesterday. The yield on the benchmark 10-year U.K. government bond climbed one basis point to 2.73%.
Manufacturing grew 0.7% in the second quarter, higher than the 0.4% initially estimated, the statistics office said. Construction growth was revised to 1.4% from 0.9%. Services, the largest part of the economy, was unrevised at 0.6% growth.
Exports rose 3.6%, the most since the fourth quarter of 2011, and imports increased 2.5%. Net trade has added to GDP for two straight quarters, the first time that’s happened since the first quarter of 2011.
Consumer spending rose 0.4%, government expenditure increased 0.9% and gross fixed capital formation jumped 1.7%.
Consumer spending was boosted by a 2.4% increase in employee compensation, partly driven by financial-services firms deferring bonuses until April, when the government cut the top rate of income tax.
