UK GDP expands in Q2 and lifts pound

Growth in the United Kingdom expanded in the second quarter as business services and finance strengthened and North Sea output surged.

GDP data was released on Tuesday and indicated GDP was estimated to have increased by 0.7% in Quarter 2 (April to June) 2015 compared with growth of 0.4% in Quarter 1 (January to March) 2015.

“After a slowdown in the first quarter of 2015, overall GDP growth has returned to that typical of the previous two years,” Joe Grice, chief economist at the Office for National Statistics, said in a statement issued with the data in London on Tuesday. The rebound takes GDP per head “back to broadly level with its pre-economic downturn peak” in the first quarter of 2008, he said.

With the U.K. economy in its longest period of continuous growth since before falling into recession in 2008 and unemployment falling, Bank of England Governor Mark Carney has said the time of record-low interest rates may soon end. He’s also said any tightening will be gradual, citing headwinds from the government’s fiscal program and weak euro-area demand.

Sterling rose against the euro after the data on Tuesday to reach the strongest level in two weeks to 70.73 pence per euro. Against the dollar the pound rose to $1.5586 after the data.

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