|  Updated: 

UK first quarter growth revised upwards but picture remains stark

By:

Add as a preferred source on Google
Wolds Top Brewery Bottler Steve Wardley oversees the bottling process of one of their ales where their 'Toast Ale' made from stale bread, barley and hops is also made at the Wolds Top Brewery in north Yorkshire, England on November 23, 2017. At a brewery nestled in rolling farmland in northern England, the process of making beer begins with dropping dozens of unwanted loaf ends, thrown away by a sandwich factory, into a large stainless steel tank. Add water, hops and yeast, and out comes the unmistakable golden beverage popular the world over. The brewery uses some of the tonnes of discarded uneaten bread in Britain to produce beer in support of an initiative fighting food waste -- and the idea is being exported around the world. / AFP PHOTO / LINDSEY PARNABY (Photo credit should read LINDSEY PARNABY/AFP/Getty Images)

The UK economy did better in the first quarter of the year than originally expected, official figures showed today, as stockpiling for the March Brexit date boosted growth.

Read more: UK economy close to recession after stagnant service sector data

Yet the Office for National Statistics (ONS) confirmed gloomy figures for the second quarter of the year which saw business investment and production fall.

First quarter GDP growth was revised upwards to 0.6 per cent from 0.5 per cent, the data body said today.

Yet the ONS confirmed that the UK economy shrank by 0.2 per cent in the second quarter as the stockpiling was unwound after Britain’s stay inside the European Union was extended.

The upward revision to first quarter growth means British GDP expanded by 1.3 per cent in the year to the second quarter of 2019, 0.1 percentage point above economists’ predictions.

This was still considerably lower than the 2.1 per cent growth in the year to the first quarter, however.

Worryingly for the UK economy, the April to June period saw the biggest fall in production output since 2012 – a downwardly-revised drop of 1.8 per cent.

“Services provided the only positive contribution to growth in the output approach to GDP, with growth slowing to 0.1 per cent in the latest quarter,” the ONS said, confirming the slowdown in the UK economy’s largest sector.

Business investment, in volume terms, was estimated to have fallen by 0.4 per cent between the first and second quarters.

John Hawksworth, chief economist at PwC, said today’s figures showed “no change to the big picture of a slowing economy being propped up by consumer spending as investment has fallen back”.

Read more: UK consumer credit growth slows to five year low

Investment has been “volatile,” he said, “falling in four of the past six quarters as businesses remain cautious about investing in the face of Brexit-related uncertainty and a slowing global economy”.

(Image credit: Getty)