UK recovery flat after spending declines
Hopes of a broad-based recovery for the UK were dealt a blow after official figures showed trade flat-lining and business spending falling between April and June.
The Office for National Statistics left overall growth unrevised at 0.7% for the second quarter of the year, but the detail showed a bigger-than-expected 2.7% slide in business investment spending dragging down the economy. Net trade made no contribution, but consumer spending rose 0.3%.
Lee Hopley, chief economist at manufacturers' organisation the EEF, said the fall in business investment "again highlights the rebalancing challenge" for the UK economy, "but if confidence is beginning to return, we should expect business investment to follow".
The economy is expected to accelerate to a pace of around 1% in the current quarter following upbeat survey data but Rob Wood, chief economist at investment bank Berenberg, said: "The UK has not yet reached the nirvana of a broad-based recovery."