- Manufacturing sector falls into recession
- UK trade gap widened
Britain’s economy has rebounded and growth has picked up as the sunny weather has helped boost construction and shopping figures, it was today revealed.
The UK’s GDP grew by 0.4 per cent in the second quarter of the year – far higher than the 0.2 per cent the quarter before when snow and frost slowed building rates.
The figures were welcomed by Chancellor Philip Hammond, who has come under growing pressure to turn on the public spending taps after years of austerity.
He today announced £780million to boost innovation and technology in the UK.
The figures, released by the Office for National Statistics (ONS) today, come as Sports Direct boss Mike Ashley bought House of Fraser – saving the retailer from administration.
The controversial billionaire – who has always wanted to own a department store – bought the ailing retailer for £90 million in a deal which has rescued many jobs.
The ONS’s head of national accounts Rob Kent Smith said: ‘The economy picked up a little in the second quarter with both retail sales and construction helped by the good weather and rebounding from the effects of the snow earlier in the year.
‘However, manufacturing continued to fall back from its high point at the end of last year and underlying growth remained modest by historical standards.
‘The UK’s trade deficit noticeably worsened as exports of cars and planes declined sharply while imports rose.’
The figures show that Britain’s services and construction industry are powering the growth – increasing by 0.5 per cent and 0.9 per cent respectively.
While business investment increased by 0.5 per cent – showing that despite the dire warnings about the possibility of a no deal Brexit, firms still have confidence in the UK.
But there is gloomy news on the UK’s manufacturing sector as production fell by 0.8 per cent.
And the trade deficit widened by £4.7 billion.
Mr Hammond said: ‘We are working hard to build a stronger, fairer economy – dealing with the deficit, helping people into work, and cutting taxes for individuals and businesses.
‘Unemployment is at its lowest since the 1970s, our national debt is starting to fall, and the economy has grown every year since 2010.
‘It is by backing innovative British companies to grow and create jobs that we will continue this progress and build an economy fit for the future.
‘Today’s £780 million investment will support innovators across the country to create the technologies of the future, and the better, highly-paid jobs we urgently need.’
The figures come after a dramatic morning for the high street as House of Fraser announced it was calling in the administrators – but Mr Ashley swooped in to buy parts of it.
But it remains unclear how many of the 17,000 jobs that were at risk will be saved by the deal.
The agreement was struck after the well-known retailer was plunged into fresh crisis after C.banner, the Chinese owner of Hamleys, pulled its investment into the troubled retail chain.
John McDonnell MP, Labour’s Shadow Chancellor, commenting on the latest GDP figures, said:
‘More than eight years of unnecessary ideologically-driven austerity has created an economy unable to cope with the instability brought about by the Tories’ mismanagement of the Brexit negotiations. The result is low growth and stagnant pay.
‘Growth is anaemic, councils are going bankrupt and the NHS is now in permanent crisis while holidaymakers are being hit by the Tories’ falling pound.
‘Labour will bring stability to the economy and rising living standards with long-term stable planning and investment and by securing a Brexit deal that puts jobs and the economy first.’