UK economy grows unexpectedly in Q2 but still lags peers

Britain eked out some unexpected growth in the second quarter, helped by a strong June performance, but it remained the only large advanced economy yet to regain its pre-COVID late-2019 level, official data showed on Friday.

The economy grew 0.2% in the second quarter, against the consensus for a flat reading in a Reuters poll of economists.

The performance was helped by monthly growth of 0.5% in June, above all forecasts in the Reuters poll which had pointed to a 0.2% uptick.

The Office for National Statistics said businesses had cited an additional national holiday in May as a factor for the increased output in June, compared to May.

“The actions we’re taking to fight inflation are starting to take effect, which means we’re laying the strong foundations needed to grow the economy,” finance minister Jeremy Hunt said, as sterling rose on the news.

While Britain has so far dodged recession unlike the euro zone, the figures confirmed its relatively poor performance since the onset of the COVID-19 pandemic.

Britain’s economy now stands 0.2% below its level in late 2019 as of the second quarter, compared with 0.2% above for Germany, 1.7% for France, 2.2% for Italy and 6.2% for the United States.

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