Warm weather boosts retail sales and growth

GDP grew by 0.4 per cent between April and June. Picture: Lisa Ferguson

The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.4 per cent between April and June, compared to the first three months of the year.

That figure was in line with economists’ estimates. It comes after growth slumped to 0.2 per cent amid frosty weather brought in by the “Beast from the East” in the first quarter.

But growth slowed on a monthly basis, with GDP rising just 0.1 per cent in June, down from 0.3 per cent in May and lower than the 0.2 per cent growth logged in April.

ONS head of national accounts Rob Kent-Smith said: “The economy picked up a little in the second quarter with both retail sales and construction helped by the good weather and rebounding from the effects of the snow earlier in the year.

“However, manufacturing continued to fall back from its high point at the end of last year and underlying growth remained modest by historical standards.”

Sterling edged up slightly versus the dollar following the news, but was still trading 0.5 per cent down at 1.27. Against the euro, the pound was up 0.1 per cent at 1.11.

Data showed the UK’s powerhouse services sector – which accounts for around 79 per cent of the economy – grew by 0.5 per cent in the second quarter, marking the strongest quarterly expansion for the sector since the end of 2016.

It reflects a pick-up in wholesale and retail trading, both of which were affected by the adverse weather earlier in the year.

Data released by the ONS also showed a 0.3 per cent rise in household spending, though employee pay growth slowed to 0.6 per cent from 1.1 per cent in the first quarter, due to weaker growth in wages.