UK GDP Revised Upward In Second Quarter

UK GDP output for the second quarter of 2013 has been revised upwards, according to officially released figures.

The Office for National Statistics (ONS) said the economy grew by 0.7% in the three months.

The ONS gross domestic product (GDP) figure was up 0.1% from the estimate released in July.

Rosier growth was seen across all sectors of the economy, with small upward revisions across manufacturing, construction and parts of services.

Second-quarter growth more than doubled from 0.3% expansion in the first three months, raising hopes that the economy is now powering out of its five-year slump.

The Treasury said the upward revision confirmed the UK is "moving from rescue to recovery".

A spokeswoman said: "There is still a long way to go, but the economy is on the right track and the Government is committed to its economic plan that has already cut the deficit by a third and enabled the private sector to create over 1.3 million new jobs."

Construction was one of the hardest hit sectors in the global crisis

Output from the UK's building sites expanded by 1.4% in the second quarter from an initial 0.9% estimate as the housing market was ignited by state stimulus schemes, including Help to Buy and Funding for Lending.

There were also brighter signs from factories, which grew output by 0.7% during the quarter, up from an initial 0.4% estimate.

And output from distribution, hotels and catering firms, was revised up to 1.7% from 1.5%, while growth across business services and finance firms was also revised higher to 0.6% from 0.5%.

The overall services sector expanded by an unchanged 0.6%, but output from the agriculture sector was revised up to 1.7% from the 1.1% first estimate.

Britain's shrinking net trade deficit, which dropped to £3.2bn in the second quarter from a £4.3bn deficit in the first quarter, also contributed to the increase in output as exports leapt to a record level.

James Knightley, economist at ING Bank, said the higher estimate of GDP will "boost optimism on the economy".

Markit chief economist Chris Williamson added it was a "very encouraging picture of a broad-based upturn across almost all sectors of the economy".

But Chris Leslie MP, Labour's shadow financial secretary to the Treasury, said: "These figures confirm that after three wasted years of flatlining we finally have some welcome but long overdue growth.

"But for all George Osborne's complacent claims that the economy is now fixed, for ordinary people things are getting harder. While millionaires have been given a huge tax cut most people are still seeing prices rising much faster than wages.

Agricultural output was revised upward by more than half

"And real risks remain. The Governor of the Bank of England is right to warn that the recovery is weak, and it is the slowest on record."

Pay and pension contributions increased by 2.4% in the second quarter - the highest quarterly increase since late 2000 - with the pay spike boosted by unusually high bonus payments in April.

The ONS said spending across various parts of the economy contributed to growing output.

Spending by households increased 0.4% in the quarter, raising hopes that higher consumer spending will drive the recovery, and is now 1.6% higher than a year earlier.

The ONS said overall economic output is now 3.2% below its peak in the first quarter of 2008 - it dropped as low as 7.2% below the peak in the second quarter of 2009.

The first estimate published in late July was based on 44% of data, while today's estimate is based on 88% of data.

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