UK Economy Grew By 0.6% Before Brexit Vote

The UK economy grew by 0.6% in the second quarter of the year - more than expected in the run-up to the EU referendum.

Preliminary analysis of the country's gross domestic product (GDP) by the Office for National Statistics (ONS) between April and June showed a surprise acceleration in output at a time when there were jitters about Brexit.

Economists had expected a similar performance to the first quarter when growth was measured at 0.4%, though it was clear growth was at its strongest in April.

The ONS charted the biggest jump in quarterly industrial production since 1999 over the three months with growth of 2.1%. The sector had been in decline over the previous quarter.

Construction output fell by 0.4% - down from a 0.3% decline in the first quarter.

The service sector, which is responsible for more than three-quarters of total UK output, slowed slightly with growth of 0.5%.

The ONS stressed that the GDP figure was an initial estimate and subject to revision but it was seized on by former Chancellor George Osborne - ousted by new PM Theresa May - that he had fixed the roof while the sun was shining."

His replacement at Number 11, Philip Hammond, said: "Today's GDP figures show that the fundamentals of the British economy are strong... so it is clear we enter our negotiations to leave the EU from a position of economic strength."

But he warned tougher times lay ahead, adding: "Those negotiations will signal the beginning of a period of adjustment, but I am confident we have the tools to manage the challenges ahead, and, along with the Bank of England, this Government will take whatever action is necessary to support our economy and maintain business and consumer confidence."

A flash survey of purchasing managers released last week suggested economic growth had slumped at its fastest rate since the financial crisis.

A survey released later on Wednesday by the CBI suggested retail sales had fallen at their fastest pace in over four years in July.

Scott Bowman, UK economist at Capital Economics, said: "The (April-June) quarterly expansion was completely driven by activity in April, with the output indices implying a 0.9% monthly expansion.

"In contrast, these indices suggest GDP fell in May and ONS initial estimates for June imply that activity was flat in June.

"This sets a poor base for growth in Q3 (the third quarter)."

The new Government has signalled it is ready to inject more money into the economy to help boost activity while the Bank of England has hinted at a possible cut to interest rates at its meeting next week.

One policymaker, Martin Weale, said earlier this week he was now in favour of further support for the economy - given the readings in the flash PMI survey.