Britain sees GDP boost as business spending up
Business spending accounted for 50% of the overall 0.8% GDP growth
Business investment surged at its fastest rate for two years in the first quarter of the year, accounting for half of the economy’s growth, the Office for National Statistics said today.
In an encouraging sign for economic rebalancing, the statistics agency said investment by firms jumped 5% in the first quarter, up from its previous estimate of a 2.7% expansion and the quickest pace seen since early 2012.
“This not only indicates that growth is becoming less centered on consumer spending but could also have positive implications for future productivity growth” said Howard Archer of IHS Global Insight.
Business spending accounted for 50% of the overall 0.8% GDP growth over the period, which was left unchanged from the ONS’s previous estimate. Some economists had expected growth to be revised up by stronger-than-expected construction growth but this was offset by a downward revision to the output from the dominant services sector.
In another tentative sign of rebalancing, the current account deficit in the first quarter shrank to £18.5 billion, down from £23.5 billion in the preceding quarter. The ONS said the improvement was driven by a lower trade deficit and a smaller shortfall in net investment and transfers income.
The growth uplift from business investment spending was cancelled out by firms’ running down the inventories.
Households looks set to remain a strong contributor to growth in the second quarter after consumer confidence hit its highest level in nine years in June. However, according to the ONS the household savings ratio ticked up slightly to 4.9% in the first quarter from 4.8% in the final three months of 2013.
- 3 Alton Towers crash: Four seriously injured and 16 guests trapped as Smiler ride carriages collide
- 5 Ann Summers survey reveals the UK's favourite sex position
Man on naked bike ride gets ejected after becoming aroused
Caitlyn Jenner's mother Ester thought her daughter, formerly known as Bruce Jenner, had transitioned for money
Charles Kennedy 1959-2015: A gifted, compassionate politician whose career was cut short by the 'demon drink' - latest news
Alton Towers crash: Four seriously injured and 16 guests trapped as Smiler ride carriages collide
Gay teenager 'forced to have sex with his own mother' to 'cure' his homosexuality, campaigners in India say
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Church of England 'one generation away from extinction' after dramatic loss of followers
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...