British economy picks up speed in Q2

The Canary Wharf finance district of London.
The Canary Wharf finance district of London.PHOTO: AFP

LONDON (AFP) - Britain's economic growth unexpectedly accelerated in the second quarter in the run-up to the nation's shock EU exit referendum, official data showed Wednesday.

Gross domestic product (GDP) grew 0.6 per cent, the Office for National Statistics (ONS) said in a first estimate for April-June, which included the shock EU exit referendum towards the end of the period.

That beat market expectations for 0.5-per cent growth, as activity was boosted by rebounding industrial production, and followed 0.4-percent expansion in the first quarter.

"Today's GDP figures show that the fundamentals of the British economy are strong," said Conservative finance minister Philip Hammond.

Chancellor of the Exchequer Hammond added Britain was in a strong position to negotiate its departure from the European Union, after Britons voted on June 23 in favour of Brexit. "In the second quarter of this year our economy grew by 0.6 percent - faster than was expected," he said.

"Indeed we saw the strongest quarterly rise in production for nearly twenty years, so it is clear we enter our negotiations to leave the EU from a position of economic strength."

Economic activity was driven by particularly strong growth in industrial production - which expanded by 2.1 per cent.

That compared with a 0.2-per cent decline in the previous three months and matched figures last seen in the third quarter of 1999.

The services sector meanwhile grew 0.5 per cent in the second quarter, but this was offset by falls in agriculture and construction.

Scotiabank economist Alan Clarke added that the second quarter was not rocked by "intense" worries over Brexit - because many had expected Britain to remain in the EU.

"The outcome of the referendum was a real surprise," said Mr Clarke.

"Most people thought the UK would vote to stay in the EU, so the pre-vote jitters were probably not as intense as feared."