Summer heatwave helped to boost economic growth

The UK economy grew at a healthy rate over the summer months, helped in part by the bout of warm weather.
The economy was also helped by a 2.9% jump in construction activityThe economy was also helped by a 2.9% jump in construction activity
The economy was also helped by a 2.9% jump in construction activity

The Office for National Statistics (ONS) said gross domestic product (GDP) growth was 0.7% between June and August.

Economists had been expecting a 0.6% rise for the three months to August.

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It was the same rate of growth logged in the three months to July after an upward revision of 0.1% for the period, thanks to revisions in the services sector.

Growth rates for June and July were both revised higher by 0.1% to 0.2% and 0.4% respectively, helping make up for flat growth in August that fell short of consensus estimates for a 0.1% rise.

The statistics agency said the summer’s heatwave provided a welcome boost to the economy, after it suffered under unusually cold weather brought in by the Beast from the East earlier in the year.

“The growth continued to pick up from the negative growth in April 2018, with the most recent period rebounding from this weak start to the year and being boosted by the warmer than usual weather in the summer months,” the ONS said.

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The economy was also helped by a 2.9% jump in construction activity as well as a 0.7% rise in production in the three months to August.

The UK’s powerhouse services sector grew by 0.5% between June and August, which the ONS said resulted in a “large positive contribution to headline GDP growth.

But the statistics agency said the rate of growth is still failing to match long-term trends.

ONS head of GDP Rob Kent-Smith said: “The economy continued to rebound strongly after a weak spring, with retail, food and drink production and house-building all performing particularly well during the hot summer months.

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“However, long-term growth continues to lag behind its historical trend.”

On a month-on-month basis, construction contracted 0.7% in August, while services failed to log monthly growth, coming in flat at 0%.

Production grew just 0.2%, having been held back by a 0.2% contraction in manufacturing activity.

Agriculture activity, meanwhile, fell by 0.2%.

Ben Brettell, a senior economist at Hargreaves Lansdown, said: “The economic rally we saw over the summer was stronger than previously thought, data from the ONS showed today.

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“In particular retail sales and house-building benefited from the unusually hot weather,” he explained.

“But more recent news was somewhat gloomier - month-on-month output was flat for August, showing the economy could be losing momentum as we move into the autumn.