U.K. GDP Grows 0.6% in Second Quarter, Surpassing Expectations

The U.K. economy demonstrated stronger-than-expected growth in the second quarter, according to preliminary official data released on Wednesday.

The Office for National Statistics reported a seasonally adjusted growth of 0.6% for the three months ending June 30, surpassing forecasts of 0.4%. In comparison, the economy had recorded a growth of 0.4% in the previous quarter.

In annual terms, the U.K. economy expanded by 2.2% in the second quarter, exceeding predictions for a 2.0% increase. The annualized growth rate for the first quarter was recorded at 2.0%.

A significant contributor to the second quarter’s growth was a 2.1% increase in industrial output, marking the strongest growth since the third quarter of 1999.

However, the growth in the service sector slowed to 0.5%, down from a 0.6% expansion in the first quarter, and construction output experienced a decline of 0.4%.

This data represents the final measure of economic performance leading up to the U.K.’s referendum on June 23, wherein voters opted to leave the European Union, a decision commonly referred to as Brexit.

Despite some economists indicating uncertainty in the British economy as the vote approached, many experts cautioned that the forthcoming third quarter figures might reflect even greater challenges. A recent survey suggested that economists expect the U.K. to contract by 0.1% in the third quarter.

In response to the better-than-expected growth data, the currency fluctuated slightly, trading at 1.3124 compared to 1.3136 prior to the report’s release. Additionally, another currency was at 0.8380, up from 0.8372 earlier.

Meanwhile, European stock markets experienced mostly positive movements, with London’s index rising by 0.25%, another major index increasing by 0.94%, France’s market jumping by 1.51%, and Germany’s index climbing by 0.88%.