UK GDP growth lifted by hot weather and World Cup | Business

The hottest summer since records began helped the British economy gather strength in the three months to July, as shoppers hit the high street and England progressed to the semi-finals at the World Cup.

The Office for National Statistics said GDP increased by 0.6% in the period from a rate of 0.4% in the previous three months, driven by a rise in activity in Britain’s dominant services sector. The latest snapshot beat forecasts made by City economists for slower growth of 0.5% in the three months to July.

The retail trade contributed 0.11 percentage points to growth over the three months to July, as warm weather encouraged sales and provided a shot in the arm for the UK economy after slower growth earlier in the year. Heavy snowfall from the “beast from the east” had previously ground the economy to a halt during March and April.

Despite the better news from the services sector, as accountants and lawyers also enjoyed a busier period, manufacturing output declined in July by 0.2%. The ONS said the drop was largely due to a fall in the production of pharmaceutical products, which can produce erratic readings for growth.

Pharmaceutical firms have come under increasing pressure as the UK prepares to exit the EU, which could curtail access to European customers for British manufacturers of drugs and medicines. Firms have begun stockpiling supplies, while AstraZeneca has in recent months begun producing drugs in Sweden alongside its operations in the north-west of England as a precaution against Brexit disruption.

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Energy production also declined, amid reduced demand for gas and electricity due to the warmer weather.

There was better news for the construction industry, which notched up record output for the usually quiet summer month of July, in the strongest three-month period for the industry since February 2017. Growth in the sector was largely driven by repair and maintenance work.

Rob Kent-Smith, the ONS head of GDP, said: “Services grew particularly strongly, with retail sales performing well, boosted by warm weather and the World Cup. The construction sector also bounced back after a weak start to the year.”

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