NIESR forecasts further small acceleration in third quarter GDP

Britain's economy is set to continue recovering after the unexpected slowdown seen at the start of the year, according to one of the country's leading think-thanks.

According to the National Institute of Economic and Social Research's monthly GDP tracker, the most recent official data on construction output suggested that the rate of growth in gross domestic product would pick-up to a 0.4% clip for the three months to June, versus a reading of 0.2% for the prior three-month stretch.

NIESR did point out that second quarter GDP was flattered by a low base of comparison for the first three months of 2018.

Nevertheless, it predicted GDP growth would experience a further modest acceleration in the third quarter to reach a pace of expansion of 0.5%.

Amit Kara, Head of UK macroeconomic forecasting at NIESR, said "The economy is showing clear signs of recovering from the unexpected slowdown in the first quarter. Taking the business surveys together, we believe that this recovery will be most noticeable in manufacturing and construction where output should start to increase once more.

"Overall though, we continue to expect the economy to grow broadly in line with its potential in the second and third quarters and not by enough to compensate for the slowdown in the first quarter."