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Official figures have shown that the UK economic growth for the second quarter of the year was unrevised at 0.7%. The figure that was released in July was increased because of a sharp rise in oil and gas production.

On Friday, the Office for National Statistics (ONS) did not change the reading for the three months to June. The figure was higher than the 0.4% growth recorded for the first quarter of the year.

The biggest contribution to trade in four years came from net trade boosting GDP by one percentage point in the second quarter as exports jumped. However, economists believe that this could be temporary because the strength of sterling means that British goods are more expensive abroad.

Business investment is on the rise as it rose 2.9% in comparison with the first three months of 2015. In the first quarter, household spending had a 0.9% rise whereas it only increased by 0.7% recently.

Last year the UK economy expanded by 3% and the Bank of England has forecast a 2.8% growth this year.

The UK manufacturing growth had a 26-month low in June but has now picked up in July according to a survey.

In July, the Purchasing Managers’ Index (PMI) rose to 51.9 in July, from 51.4 in June. This shows good improvement as any figure above 50 indicated expansion.

Despite this result, it is still below the average of 54.3, which the sector has had since April 2013.

In addition, manufacturing has been at its lowest since September 2014 when it comes to the pace of growth of new orders, as this slowed to 52.2. Product expansion continues to be dependent on consumer goods manufacturing, which offset a contraction in investment goods. This includes goods such as plant and machinery, according to Markit.

The sterling-euro exchange rate sapped the demand for exports and new export orders contracted for the fourth consecutive month in July.

 

Last month the annual rate of house price growth fell to a two-year low, stated the Nationwide building society. In June, annual house price inflation fell to 3.3%, compared to 4.6% in the previous month. This is much lower than two years ago, when prices were rising by 11.8%.

The average cost of UK property now stands at £195,055 because between May and June, prices across the UK actually fell by 0.2%. House prices in Wales and Scotland however, have fallen over the last year.

Howard Archer, who is the chief UK and European economist at IHS Global Insight, said that he still expects that house prices will rise by 6% this year and 5% the following year. Northern Ireland has the fastest growth, as he region saw its prices rise by 8% over the year. London house prices rose by 7.3% and in Scotland, prices fell by 1% compared to one year ago. In Wales, prices were down by 0.8%.

The Confederation of British Industry (CBI) has cut its growth forecast for the UK economy and has warned of further risks posed by the end of the Greek crisis and uncertainty about the EU referendum.

CBI predicts growth of 2.4% and 2.5% in 2015 and 2016. This is down from 2.7% and 2.6%, which were the forecasts made in February. The decision to lower the expected growth is in line with other organisations that have revised figures, one being the Bank of England who recently revised its growth forecasts to be lower.

The blame was pointed towards the weaker-than-expected growth in the first quarter and the 0.3% expansion marked the UK’s weakest growth since the end of 2012. The CBI stated that if productivity continues to be weak, it could pose a threat to the UK economy. It also warned that the uncertainty over the EU referendum’s outcome meant that investment spending could also be delayed.

It is possible that this may not be a trend but a blip because it mostly reflects a sharp slowdown in Britain’s official economic growth rate in the first three months of this year and the employers’ group wants the government to stick to its plan to fix the public finances.

John Cridland, who is the CBI director-general, continues to feel confident that the UK economic recovery was on track and as a result of this, UK employers were feeling positive.

However, the CBI forecast came as the accountancy firm and services group BDO said that UK manufacturing firms’ confidence had dropped at its highest rate in two years. In addition to this, its monthly manufacturing optimism index, which is based on the UK’s main business surveys, had also seen a four-point drop. This is its biggest drop since March 2013. Low oil and gas prices had curbed investment in the sector and therefore slowed orders for manufacturing firms and a combination of the strong pound and a weak Eurozone hit exports, said BDO.

The Office for National Statistics (ONS) has reported that  UK industrial industrial output and production has increased more than expected in September.

industrial-news

The Manufacturing sector has beaten economists predictions for September 2013

Economists’ predictions of 0.5% for September were surpassed as Industrial output increased by 0.9% in this period. The increase was due to increased productivity in manufacturing, mining, quarrying, and water management contributed to September’s growth.

Considering that the industrial sector currently makes up about a sixth of the UK economy this can only be another positive sign of a recovering and growing economy.

Output in September was 2.2% higher compared with the same period a year ago, marking the strongest annual growth since January 2011. Increased productivity in manufacturing, mining, quarrying, and water management contributed to September’s growth.

The ONS also said that manufacturing saw a 1.2% rise in output between August and September, with UK companies making more pharmaceuticals, transport equipment, computers, and electronics.

September’s growth lies in contrast to August, where industrial output fell unexpectedly, showing its biggest decline for nearly a year.

This news is great for Hastings and the surrounding areas as Hastings is a major manufacturing hub in the Southeast. Growth in sectors like this will help other sectors increase and generally raise confidence in the economy both locally and nationally. You can read more about Hastings industrial heritage and why manufacturing is well established and the advantages of moving your business, here.