Large swathes of the UK economy went from zero to hero in the space of just one quarter.
The contrast between the locked-down first three months of the year with the second quarter was widely predicted but is no less remarkable for that.
“Crucially the growth came throughout the quarter, with all three months recording a jump in GDP as pandemic restrictions eased and more sectors of the economy came back online.
Most reassuring of all is the pre-eminent role of British consumers in the recovery. While the UK government spent vast sums propping up the economy during the darkest days of the pandemic, the second quarter’s growth was broad-based and largely demand-led, with real household expenditure jumping an impressive 7.3%.
Sam Fuller, Director of Financial Markets Online, writes: “The pace of the UK’s vaccination programme – which has successfully delivered two Covid jabs into the arms of 75% of the adult population – is an important factor and may explain why UK growth has soared to treble that of Germany and four times that of its European neighbour France.
“Growth is coming with inflationary side effects, and at 2.5% in June, the annual rate of CPI was five times what it was during the lockdown at the start of 2021.
“Nevertheless the Bank of England has made clear it has little desire to raise interest rates from their current near-zero level – the lowest they’ve been for three centuries – to contain inflation.
“All this is music to the ears of the equity markets, who see a UK economy growing fast across the board and a horizon free of any spectre of rising interest rates.”