UK GDP contracted in line with forecasts in Q2

Office for National Statistics said, UK gross domestic product (GDP) in volume terms was estimated to have fallen by 0.2% in Quarter 2 (Apr to June) 2019, unrevised from the previous estimate.

When compared with the same quarter a year ago, UK GDP increased by 1.3% to Quarter 2 2019; down from 2.1% to Quarter 1 (Jan to Mar) 2019. Economists had expected a 1.2% increase.

Services provided the only positive contribution to growth in the output approach to GDP, with growth slowing to 0.1% in the latest quarter.

Private consumption, government consumption and net trade contributed positively, while gross capital formation contributed negatively to GDP growth in Quarter 2 2019.

GDP was estimated to have increased by 1.4% between 2017 and 2018, unrevised from previous estimates; this was lower than the upwardly revised 1.9% growth seen between 2016 and 2017.

Data in this bulletin are consistent with our annual UK National Accounts, The Blue Book 2019 publication to be published on 31 October 2019; estimates therefore incorporate new data and methods throughout the time series.

A separate report from the ONS showed that business investment, in volume terms, was estimated to have fallen by 0.4% to £49.2 billion between Quarter 1 (Jan to Mar) 2019 and Quarter 2 (Apr to June) 2019; this follows a 0.8% increase in Quarter 1 2019, the first quarter-on-quarter increase in business investment since Quarter 4 (Oct to Dec) 2017. Gross fixed capital formation (GFCF), in volume terms, was estimated to have fallen by 0.9% to £87.2 billion between Quarter 1 2019 and Quarter 2 2019. Between Quarter 2 2018 and Quarter 2 2019, business investment was estimated to have fallen by 1.4% from £49.9 billion; GFCF was estimated to have increased by 0.3% in the same period from £87.0 billion.