Economy grows 0.4 per cent in second quarter

The UK economy grew by 0.4 per cent between April and June, helped by hot weather and a summer of major sporting events, according to official figures.

The Office for National Statistics published the figures on 12 August.

A summer boost

The ONS said the hot weather had boosted spending in some areas, including drinks, food and leisure. Major sporting events, including the FIFA World Cup in North America, in which England and Scotland took part, also helped pubs, bars and retailers.

The growth came despite a fall in output in April, when the war with Iran hit businesses and consumers.

Better than feared

Many economists had feared the war would push the UK towards recession. The figures suggest the economy has proved more resilient than expected, although growth remains modest.

The economy grew by 0.6 per cent in the first three months of the year.

Inflation and interest rates

Inflation remains above the Bank of England's 2 per cent target, and is expected to rise in the coming months because of higher energy prices. The Bank held interest rates at 3.75 per cent for the fifth time in a row at the end of July, but warned that they may have to rise later in the year.

A new government

The figures are the first since Andy Burnham became Prime Minister in July. He has said his government will focus on the cost of living, and has announced measures including a £2 cap on bus fares outside London and a cut in business rates for pubs and music venues.

The new Chancellor, John Healey, is expected to set out his plans for the economy later in the year.

The heat

The summer has been one of the hottest on record, with temperatures reaching 38 degrees. While the heat has helped some businesses, it has caused problems for others, including farmers, who are facing drought, and outdoor workers.

The outlook

Economists warn that the outlook remains uncertain. The war with Iran continues to affect energy supplies, and new American tariffs on British goods took effect in July.

Unemployment also remains high compared with recent years.

But the figures will be welcomed by the government as evidence that the economy can grow despite the challenges.