Heat set to melt frosty UK growth

It comes after growth slumped to 0.2 per cent amid frosty weather in the first three months of the year.

Andrew Goodwin, the lead UK economist at Oxford Economics, said: “The month-on-month outturns for GDP in April and May were strong, at 0.2 per cent and 0.3 per cent respectively, largely because of a rebound after March’s snow-related disruption and a couple of very strong months for retail sales.

“But, with retail sales edging down in June, the service sector is likely to provide less impetus and ensure a weaker outturn for monthly GDP growth of around 0.1 per cent.

“However, this would still generate quarterly growth of 0.4 per cent for Q2 as a whole.”

Analysts at Investec are also expecting that June GDP growth – marking the last month of the quarter – will have struggled to maintain the pace seen in May when the economy received a “double boost” from warm weather and the royal wedding.

“Principally, the expansion in construction output is almost certain to have moderated from May’s two-year high,” Investec analysts led by Victoria Clarke said.

“The services sector may also have seen a more moderate pace of growth, as we have already seen in the retail sales figures.

“In contrast, we expect activity to pick up in the industrial sector.”

The Bank of England – which last week raised interest rates for the second time since the financial crisis – has made predictions in line with consensus for the second quarter.

It comes amid a resilient jobs market and wage growth starting to outstrip inflation, although recent readings have been weaker than expected.

Retail sales have also bounced back, thanks in part to the recent heatwave spurring on shoppers.

While growth is not back up to pre-crisis levels, Governor Mark Carney has said previously that Britain’s economy has a “new, lower speed limit”.