MNI 5 Things: UK GDP Accelerates in Q2 but Concerns Remain

By Laurie Laird and Jamie Satchithanantham

     LONDON (MNI) - The following are the key points from the first estimate of

second quarter UK GDP published Friday by the Office for National Statistics.

     - UK GDP growth accelerated by a more-wholesome 0.4% in the second quarter

of the year, but strength in services masked pockets of weakness in other key

sectors.

     - This new GDP series may be less subject to drastic revision as Friday's

data provide richer content than the previous first estimate. The new data set

contains 80% of output data (versus 45% in the old first estimate), 40% of

income data (vs 0%) and 60% of the expenditure components (vs 0%).

     - The services sector put in its best quarterly performance since Q4 2016,

accounting for the bulk of the Q2 GDP expansion, however the sector appears in

slowdown -- stirring concerns over whether any momentum will be carried forward

into Q3. After growing 0.4% m/m in April, output growth slowed to 0.2% in May

before moving sideways in June.

     - Production and manufacturing activity continued to disappoint, both

registering their worst respective q/q showing in five-and-a-half years. After

two consecutive quarters of decline, the manufacturing sector is technically in

recession and has failed to retain momentum following a sterling-supported run

in 2017.

     - Trade weighed heavily on GDP despite a narrowing of the deficit in June.

Pharmaceutical exports flattered June's trade balance, countering media reports

of stockpiling in recent weeks.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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