business

World Cup and heat wave increase UK GDP to 0.6%

World Cup and heat wave increase UK GDP to 0.6%

The World Championship helped stimulate the services sector by 0.6%

The World Championship helped stimulate the services sector by 0.6%. Photo: Jorge Figueroa / Flickr / Creative Commons CC BY 2.0

British GDP grew by 0.6% in the three months to July, up from 0.4% in the second quarter and analysts' expectations by 0.5%, as retail sales were boosted by the hot weather and reaching the semi-finals of the World Championship in England. .

According to the Office for National Statistics, the services saw the strongest growth area, with the sector growing by 0.6%, raising overall growth at its highest level since August 2017.

In addition, the retail trade and wholesale trade grew by 2.1% and 1.6% respectively.

However, industrial production fell by 0.2% in July due to the negative growth of pharmaceutical products.

Rob Kent-Smith, head of GDP at the ONS, said: "Economic growth picked up in the three months to July, with services growing particularly strongly, with good retail sales, driven by warm weather and the World Cup. also back after a weak start of the year.

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"Production fell, however, with production once again declining slightly, while energy production and supply fell as a result of reduced demand.

"The dominant service sector once again led to economic growth in the month of July with engineers, accountants and lawyers who all went through a busy period, supported by a growth in construction, which again reached a record level."

In July, the National Social Security Office replaced the traditional quarterly publication by publishing a monthly GDP estimate.

Andrew Wishart, UK economist at Capital Economics, commented: "The more timely survey data suggests that the economy grew by around 0.4% in August, so that the strength of GDP growth in July may turn out to be volatile to be.

"Indeed, the surveys suggest that while the shrinking of production is now over, the sector will lag behind services.

"Nonetheless, today's GDP figures are a slight upside risk to our forecast that the economy will grow by 0.4% quarter on quarter in the third quarter."

Ian Forrest, analyst in investment research at The Share Center, said: "The services sector experienced good growth in July and the ONS chose engineers, accountants and lawyers as particularly busy, while the construction sector also saw a good recovery in activity.

"Production and production have declined, but they are relatively small parts of the total economy, and the picture presented with today's data suggests that the third quarter builds on the momentum in the second quarter, rather than returning to the weakness in the first quarter.

"These are reassuring figures, but the pound sterling reacted with only a small increase that may be due to the fact that growth was affected by unusual factors such as the World Cup and the heat wave."

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