Britain’s economy is exhibiting a “notable slowdown”, according to official statisticians, after figures revealed that year-on-year second-quarter growth rose at a slower pace than previously thought.
The Office for National Statistics (ONS) revised down its year-on-year reading for the UK economy in the second quarter, with gross domestic product (GDP) coming in at 1.5%, down from a previous estimate of 1.7% for the period.
Head of GDP at the ONS Darren Morgan said: “There was a notable slowdown in growth in the first half of 2017.
“The often buoyant service sector was the only area to grow in the second quarter, mainly due to increases in computer programming and retail.”
Services was the only sector to show growth in the three months to June, with agriculture, production and construction all declining.
However, ONS figures also show that services unexpectedly contracted 0.2% in July following June’s reading of 0.3% growth.
Sterling dipped on the news, 0.4% down versus the dollar at $1.33 and 0.5% down against the euro at €1.13.
Quarterly economic growth for April to June, meanwhile, was unchanged at 0.3%.
Business investment is now estimated to have increased by 0.5% in the period and the contribution of net trade was revised up to 0.4% from zero.
Separate figures released as part of a data dump by the statistics watchdog showed that the households saving ratio rose from 3.8% in the first three months of the year to 5.4% in the second quarter – the largest quarterly increase since 2013.
Britain’s yawning current account deficit – which measures the amount of money flowing in and out of the economy – grew to £23.2 billion in the second quarter, up from £22.3 billion in the first three months of the year.
The news comes after Bank of England governor Mark Carney gave a fresh signal that a rise in interest rates is on the cards.
Mr Carney said that while interest rates were set to rise if the economy continued on its present course, it would happen in a gradual way.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “On balance, today’s data are a setback for the hawks on the Monetary Policy Committee arguing that higher rates are needed to cool the economy immediately.”