UK economy picks up speed in Q2 but underlying growth still weak

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(Aug 10): Britain's economy picked up some speed in the second quarter after a sharp winter slowdown earlier in the year but lost momentum in June, official data showed on Friday.

Gross domestic product expanded 0.4 percent in the April-June period, as expected in a Reuters poll of economists, the Office for National Statistics said.

Britain's economy slowed after the 2016 Brexit vote and is expected to continue to expand at weaker pace than most other developed economies with the country due to leave the European Union in March next year.

The quarterly figure is likely to reassure Bank of England policymakers who last week raised interest rates to a new post-financial crisis high of 0.75 percent.

"The economy picked up a little in the second quarter with both retail sales and construction helped by the good weather from the effects of the snow earlier in the year," ONS statistician Rob Kent-Smith said.

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

In June alone, the economy grew 0.1 percent after a 0.3 percent rise in May, weaker than forecasts in the Reuters poll for a 0.2 percent expansion, the ONS said.

Growth over the second quarter was driven mostly by the service sector, the ONS said. Net trade was the biggest drag on the economy since the third quarter of 2016.

Quarterly growth in household spending quickened slightly to 0.3 percent from 0.2 percent in the first quarter, but stood only 1.1 percent higher than a year ago -- the weakest annual increase since early 2012.

Compared with a year ago, the economy stood 1.3 percent larger in the second quarter, only a touch above a nearly six-year low touched in the first three months of the year.