MNI BRIEF: UK Q2 GDP Revised Up; Current Account Gap Narrows

UK GDP expanded by 5.5% in the second quarter, a significant upward revision from the 4.8% pace reported in August. That leaves output 3.3% below pre-pandemic levels, a smaller gap than the initially-published 4.4%. According to the ONS, updated and improved data from the health and entertainments sector were drivers of the revision.

Household spending accounted for 3 percentage points of growth, expanding by 7.9% in Q2, up from the initial estimate of 7.3%. The surge in spending pressed the savings rate down to 11.7% from 18.4% in Q1. Services expanded by 6.5% in Q2, well above the 6.5% initially-reported pace, while business investment rose by 4.5%, above the original estimate of 2.4%.

The current account deficit narrowed to GBP8.6 billion in Q2, or 1.5% of GDP from GBP8.9 billion (originally reported as GBP12.8 billion). That's the lowest deficit to GDP ratio since Q2 of 2020.