The UK economy expanded as initially estimated in the second quarter and the current account gap widened on visible trade deficit and primary income shortfall, data from the Office for National Statistics revealed Friday.
Gross domestic product grew 0.4 percent in the second quarter, unrevised from the previous estimate. The growth rate for the first quarter was revised down to 0.1 percent from 0.2 percent.
On a yearly basis, the economy expanded 1.2 percent, which was revised down slightly from 1.3 percent.
The production-side breakdown of GDP showed that construction grew 0.8 percent after falling by revised 1.6 percent, the most since mid-2012.
Manufacturing output contracted 0.7 percent in the second quarter. Meanwhile, growth in the dominant services was revised up to 0.6 percent from 0.5 percent.
Due to higher visible trade deficit and primary income shortfall, the current account deficit widened by GBP 4.6 billion to GBP 20.3 billion in the second quarter. This was equivalent to 3.9 percent of GDP.
The total trade deficit widened to GBP 6.1 billion from GBP 3.3 billion a quarter ago. The widening was driven by an increase to imports of goods, which reached a record high of GBP 120.6 billion in the second quarter.
Another report showed that household spending gained 0.4 percent sequentially and by 1.6 percent from the previous year.
Data also showed that business investment decreased 0.7 percent instead of the 0.5 percent rise estimated previously. Consequently, gross fixed capital formation declined by 0.5 percent versus prior estimate of 0.8 percent increase.
The GDP figures were pretty disappointing and with plenty of downside risks to the outlook, the Bank of England unlikely to be in any hurry to raise rates again soon, said Ruth Gregory, an economist at Capital Economics.