A weak trade performance weighed on growth, however, as the current account deficit widened and net trade took 0.8 percentage points off the GDP figure – something that may have been partially addressed in the third quarter as the pound has fallen sharply, making imports more expensive.
The ONS also said that early signals indicate the economy continued to grow well following the referendum at the end of June.
“Despite some very weak indicators appearing in the immediate aftermath of the referendum, estimates gathered by ONS from more than 23,000 firms now suggest that the services sector – which accounts for three quarters of the economy – in fact grew strongly in July,” said the ONS’ head of GDP Darren Morgan.
“Further information also suggests that the whole economy also grew slightly more strongly in the months before polling day than previously thought. Together this fresh data tends to support the view that there has been no sign of an immediate shock to the economy, although the full picture will continue to emerge.”
Philip Hammond, the Chancellor, said: “The UK started the year in a position of economic strength, and we can see today that this momentum has continued in the services sector – the largest part of our economy.
“We want to build on this strength as we forge a new relationship with the EU and deliver an economy that works for all. The UK is well-positioned to deal with the challenges, and take advantage of the opportunities, that lie ahead.”
John Hawksworth, chief economist at PwC, said: “Today’s data confirmed the generally favourable picture of how the UK economy evolved immediately before and after the Brexit vote. “