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UK annual growth rate revised down

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The UK’s economy grew at a slower annual pace than previously estimated in the three months to June, according to the latest official figures.Gross domestic product grew by 1.5% from a year earlier, the Office for National Statistics (ONS) said, down from the earlier estimate of 1.7%.However, the quarterly growth rate remained unchanged at 0.3%.Separate figures from the ONS indicated that the UK’s key service sector contracted by 0.2% in July.The ONS said a key factor behind the fall was a drop in activity in the film industry following a particularly strong June.In the three months to July, the service sector grew by 0.5% compared with the previous three months, which the ONS said was the highest quarter-on-quarter growth in 2017 so far. Business boost”There was a notable slowdown in growth in the first half of 2017,” said Darren Morgan, head of gross domestic product at the ONS. “The often buoyant services sector was the only area to grow in the second quarter, mainly due to increases in computer programming and retail.”Household spending growth continued to slow in the second quarter. However, revised figures show business investment grew more strongly than previously estimated.”Chris Williamson, chief business economist at IHS Markit, said the latest ONS figures suggested that interest rates could continue to stay at their present record low of 0.25%.”From a recent historical perspective, since the Bank of England’s independence, it would be unprecedented for the central bank to tighten policy with the data pointing to such anaemic economic growth,” he said. “However, policymakers continue to fuel expectations that interest rates will rise soon in response to higher-than-expected inflation.”
Source: BBC