UK GDP revised lower in the second quarter

The UK’s current account deficit narrowed more than expected in the second quarter, the Office for National Statistics revealed on Wednesday.

There was also a faster-than-expected narrowing of the UK’s current account deficit in the second quarter.

The Chancellor will be under less pressure to slash spending, as this extra growth means tax revenues can be revised upwards.

The United Kingdom economy is now 5.9% larger than its pre-crisis size in the second quarter, a revision up from the previous estimate of 5.2%, meaning the United Kingdom economy has surpassed its pre-downturn peak (seen in Q1 2008) one quarter earlier than previously estimated.

The deficit equated to 3.6% of gross domestic product at current market prices, down from 5.2% in the first quarter.

A Treasury spokesman said: ‘These new figures from the ONS show that the United Kingdom was the fastest growing G7 economy in both 2013 and 2014.

Analysts suggested that there were signs the UK’s economic growth in the third quarter of the year would not be able to keep up the pace achieved in the second quarter.

Howard Archer, chief United Kingdom and European economist at IHS Global Insight, said: “The slight downward revisions to year-on-year GDP growth have little implications for monetary policy”.

In its final estimate for the April-June quarter, the ONS left growth unchanged and attributed it to a rise in oil and gas production.

“We believe that it is now an extremely tight call as to whether the Bank of England lifts interest rates from 0.5 per cent to 0.75 per cent around February, or holds fire until nearer mid-2016”.

He added: “While increased global economic uncertainty poses a downside risk, the United Kingdom economy can hopefully recover from its current soft patch, resulting in overall GDP growth of 2.4% in 2015”.