UK growth accelerates; Greece begins talks with creditors - as it happened
Britain's GDP-per-head is finally back to its pre-crisis levels, but factories are struggling to grow
- Tight security as Greek bailout talks begin
- Summary: GDP jump puts rate hikes in focus
- UK GDP grew by 0.7% <- coverage starts here
- But manufacturing output fell by 0.3%
- Key charts start here
- Reasons to be cautious about GDP
2.11pm BST
PS: Don't miss this piece on child poverty in the UK ; worth considering alongside today's 'encouraging' GDP data:
Excellent @Chakrabortty piece on child poverty, charity and holiday hunger, a "Live Aid" for Britain's poor http://t.co/lXD7KXJuHH
2.06pm BST
That may be all for today, I think. I'll be back if there's any major news out of Greece. Otherwise, enjoy the afternoon..... GW
2.04pm BST
Greece has been given the green light to re-open its stock market, according to Bloomberg.
#ECB approves Greek proposals for Bourse reopen, BBG reports citing ASE spokeswoman.
1.57pm BST
Those bailout talks in Greece have not got off to a great start:
Troika official stuck in Athens lift - PHOTOS - http://t.co/KIGONn1CZi pic.twitter.com/nabSbpi6M5
1.28pm BST
#Greece FinMinistry: Troika heads expected in Athens tomorrow,expect to complete technicl work on bailout discussions by Friday ~@livesquawk
1.06pm BST
Standard & Poor's has issued a warning that monetary policy is diverging, in both major economies and developing ones.
The US is likely to raise interest rates in September, S&P reckons, followed by the Bank of England. In contrast, the European Central Bank is continuing to ease policy with its a60bn/month stimulus programme.
"Over the next 18 months, we expect tightening of monetary policy in Turkey and South Africa--the countries with large external deficits that are vulnerable to a reversal in global capital flows.
In Latin America, we expect both Brazil and Mexico to tighten monetary policy, albeit for different reasons."
12.55pm BST
The tale of former Greek finance minister Yanis Varoufakis's secret Plan B for a parallel payment system has taken another twist.
The European Commission has robustly denied Varoufakis's claim that Greece's creditors had control of the computer systems of the tax offices, forcing him to consider hacking into it.
At presser @Mina_Andreeva denies @yanisvaroufakis claim troika controls gen secretariat of public revs. Troika "certainly do not control" it
Strong stuff -- EU's @Mina_Andreeva says @yanisvaroufakis claim Troika controlled state tevnue mechanism 'false and unfounded'
Sorry you lost me, Prof. Varoufakis. #Greece http://t.co/pJUM5cpwhK pic.twitter.com/uqTyeUqqpy
Varoufakis: Once my plans were leaked, I became committed to transparency. Amazing http://t.co/oGtflEjLaP pic.twitter.com/AltSRJu11F
12.16pm BST
Time to look at Greece. And in Athens the inspector tour by international auditors continues apace - under draconian security.
At least 250 police tasked with #Troika 's security in #Athens #Greece - VIDEO - http://t.co/rbCxq4CvWD pic.twitter.com/nzUuL1MDA0
"We are informing [them] and giving the information that is needed so that the negotiations move normally."
12.07pm BST
The decision on whether to raise UK interest rates will soon fall, in part, on the shoulders of economist Gertjan Vlieghe.
Appointing an external member to the MPC who worked at the #BoE and a large hedge fund? https://t.co/uDezPw4osk #GBP #GDP
11.49am BST
Time for a recap on the GDP figures, by Jill Treanor:
Britain's economic growth bounced back in the second quarter of the year, according to official data on Tuesday, fuelling the debate about the first rise in interest rates since the financial crisis.
There were also signs that living standards are returning to their pre-crisis levels as the Office for National Statistics said that GDP per head was now "broadly equal" to the first quarter of 2008, before the economic crisis drove the UK into recession.
Related: UK economy powers ahead by 0.7%
11.36am BST
My colleague Katie Allen writes that while Britain's economy is growing at a decent rate, the underlying picture is less cheery - with many people still finding the labour market tough:
The Bank of England's chief economist, Andy Haldane, has warned about this as he makes the case for holding off a potentially damaging early interest rate rise.
"There are still people without a job who would like a job; there are still people with jobs who would like to work more hours. And, even for those that have got jobs, their pay - in most cases - isn't racing away," he told BBC Newsnight last week.
Related: UK GDP growth: we have rarely had it so good, apparently
11.25am BST
UK growth bounces back as GDP rises by 0.7%: http://t.co/qzpOQuBmef pic.twitter.com/YGLg6RfptU
11.08am BST
Chris Leslie MP, Labour's shadow chancellor, fears Britain's economy isn't balanced enough to handle fresh problems in Europe and China, or a slowing world economy.
"The OBR has revised down productivity next year and for three years after that. Manufacturing is down by 0.3% and the Government is on course to miss its exports target by hundreds of billions of pounds.
"The Chancellor is complacent at a time when he should take action to support exporters and strengthen Britain's infrastructure. Pulling the plug on major rail electrification and hitting households next April with a work penalty in the tax credit system are the wrong choices for the long term."
10.55am BST
The 0.3% decline in manufacturing output in the last quarter has alarmed Britain's trades unions.
"The government's economic plan is not delivering what was promised. We were told there would be a march of the makers, but instead manufacturing continues to decline. And while there is a desperate need for affordable homes, construction output remains in the doldrums.
"We need a new plan for productivity and growth, because the current one is not delivering across the whole economy - a plan with stronger investment in infrastructure, innovation and skills. But the cuts the Chancellor is planning will damage demand and run the risk of reducing future growth."
10.49am BST
Andrew Sentance, senior economic adviser at PwC, is also struck by how private sector service firms are leading the recovery, thanks to consumer spending.
Activity in retailing, hotels, restaurants and related services is 4.5% up on a year ago and the output of transport services has risen by 3.7%. Business and financial service growth in the past year is also over 3%.
Manufacturing output and public services are much more sluggish, with output growing by just 0.5% or so over the past year
10.38am BST
Britain's factories probably suffered from the weak European economy and stronger pound, says Jeremy Cook of World First:
"People are spending money because they feel more secure in their jobs and those jobs are starting to pay more than inflation is taking away.
"The environment for manufacturers is less pleasant. Despite the government's pledges to drive a 'march of the makers' and reinvigorate the UK's manufacturing sector, growth remains hard to come by.
10.37am BST
I now understand George Osborne's motoring references:
Interviewing Chancellor in motorbike factory Him: The UK is motoring ahead Me: But it's been a long & winding road, no? Now feel a bit sick
10.32am BST
UK on course to grow at 2.6% in 2015. @PwC_UK forecasts Britain will head G7 growth league for 2nd year in a row http://t.co/JSd2AweQbh #GDP
10.31am BST
The pound jumped when the GDP data was released, as traders anticipated that stronger growth made an interest rate rise more likely.
Sterling has gained half a cent against the US dollar today.
10.26am BST
James Knightley of ING sums up the growth data:
The dominant service sector also grew 0.7% quarter-on-quarter, while there was also a strong contribution from the oil and gas industry.
However, manufacturing output fell 0.3% as a combination of the strong pound and weak export markets hurt activity. Construction output was flat on the quarter.
We suspect that two members of the MPC may well vote for a rate hike in August although there may not be critical mass until February next year.
10.21am BST
If Britain maintains its current growth rate, it could retain the title of fastest-growing G7 country.
Howard Archer of IHS Global Insight explains:
Growth of 2.6% in 2015 would likely make the UK, the fastest growing G7 economy as it was in 2014.
IHS currently forecasts GDP growth in 2015 of 2.2% in the US, 1.7% in Germany, 1.2% in France and 1.0% in Japan. We see overall Eurozone growth at 1.5% in 2015
10.15am BST
After a slow start, Britain is the third-fastest growing member of the G7 since the financial crisis, behind Canada and the US:
10.07am BST
Oil and gas extraction also made a positive contribution to growth, with output jumping by 7.8%.
The ONS say that may be due to tax cuts for the oil industry announced in March's budget.
9.59am BST
This is disappointing. Britain's manufacturing sector shrank by 0.3% during the last quarter, dealing another blow to hopes of a "March of the Makers".
In contrast, the business services and finance sub-sector grew by 0.8%.
9.55am BST
I know we bang on about services being the 'dominant' part of the economy. But it's true.
For all the talk of manufacturing revival, only the service sector is larger than its pre-crisis peak:
9.53am BST
The UK economy has now grown for 10 straight quarters, and bounced back from its weakness at the start of the year:
9.44am BST
UK GDP growth in Q2 leaps to 0.7%, not cold, not too hot. No wonder the PM was so full of beans: up in a mo in Singapore talking corruption
9.43am BST
Chancellor George Osborne has welcomed today's figures with a flurry of automotive metaphors:
GDP growth 0.7%. Shows Britain motoring ahead with economy producing as much per head as ever before. We must stay on road we've set out on
9.42am BST
Now this is significant. Britain's economic output, per person, has finally reached its level achieved before the crisis.
The ONS says that:
The 0.7% increase in GDP growth in Quarter 2 (Apr to June) 2015 implies that GDP per head would be broadly equal to the pre-economic downturn peak in Quarter 1 (Jan to Mar) 2008.
ONS says UK GDP per head now "broadly level" with its pre-crisis peak
9.42am BST
The total UK economy is now 5.2% higher than its pre-crisis peak in early 2008.
9.36am BST
Once again, Britain's service sector provided the bulk of the growth in the last quarter
.@ONS UK #GDP in Q2 (1st est.) +0.7%. Thank goodness for services... #UKeconomy #GDP http://t.co/ucRgatQ3iO pic.twitter.com/JHHfOp6WNx
9.35am BST
You can see the full report from the Office for National Statistics here:
Gross Domestic Product Preliminary Estimate, Quarter 2 (Apr to June) 2015
9.34am BST
Britain's agriculture sector shrank by 0.7% during the quarter.
9.33am BST
Here's some detail:
Britain's service sector grew by 0.7% during the last quarter, maintaining its dominant contribution to the economy.
9.33am BST
On an annual basis, the UK economy grew by 2.6% - down from 2.9% three months ago.
9.30am BST
Here we go!
Growth across the UK accelerated in the last quarter.
9.20am BST
The pound is dipping a little as traders get edgy with 9.30am BST approaching.....
#GBP weakness heading into UK Q2 GDP figure in 15 mins. #headsup
9.11am BST
Ilya Spivak, currency strategist at DailyFX, also believes today's growth data could put the Bank of England in the spotlight:
An upbeat result would reinforce recent comments from BOE officials expressing concerns about wage inflation and fuel speculation about oncoming tightening.
Needless to say, such a scenario is likely to bode well for the British Pound.
8.59am BST
Just 30 minutes to go......
Upcoming event in 30 min [08:30 GMT] - Preliminary UK GDP (Quarter on Quarter, cons:0.7%, prev:0.4%) #forex #fx #finance
8.59am BST
Back in the City, oil giant BP has fallen back into the red as the costs of the 2010 Gulf of Mexico disaster continue to mount.
My (new) colleague Graham Ruddick has the story:
Related: BP reveals $6.3bn quarterly loss due to Deepwater Horizon bill
8.54am BST
There are a range of forecasts for today's GDP reading - from a punchy 0.8% growth down to a mediocre 0.4%.
UK Q2 GDP growth f'cast to rise to 0.7% qq from 0.3%: @ReutersPolls. Range 0.4-0.8%; top 5 most accurate saying 0.7% pic.twitter.com/9uVlWtxOhw
8.44am BST
French bank Socii(C)ti(C) Gi(C)ni(C)rale predicts that the UK economy grew by 0.6% in the last quarter - slightly lower than the City consensus of 0.7%.
Their global strategist, Kit Juckes, agrees that the Bank of England could soon hike borrowing costs.
The UK economy is trundling along, and with daily reports of shortages in the labour market, it is trundling closer to the rate lift-off.
8.39am BST
Over in Greece, officials from its creditors have just been spotted arriving for today's talks, according to AFP:
Paparazzi i la grecque: Troika localisi(C)e i 10h i la Comptabiliti(C) nationale via @protothema http://t.co/zP4ll0Dw5w pic.twitter.com/LBgwHwqqDH
The troika begins work in Athens amid tight security - VIDEO - http://t.co/cPsToKBpGL pic.twitter.com/EGFCIuqVDq
8.33am BST
The FTSE 100 index of blue-chip shares has risen by 30 points in early trading, as investors await today's GDP figures at 9.30am BST.
8.24am BST
Let's be frank, GDP is a somewhat blunt instrument when it comes to measuring how an economy is performing, for several reasons....
Related: GDP is a mirror on the markets. It must not rule our lives | Diana Coyle
8.16am BST
Today's data may show that UK factories and builders struggled in the April-June quarter, while the service sector performed better.
From the Press Association's preview:
Investec economist Chris Hare said the dominant services sector - representing three-quarters of output - was likely to do "most of the legwork" with the beleaguered construction and manufacturing industries set to have shrunk.
Scotiabank's Alan Clarke said 0.7% was "probably the right call" but that monthly data published so far meant that any risks to this were skewed towards a slightly weaker rather than stronger outcome.
8.08am BST
Today's growth figures will also help decide when the Bank of England might start to hike borrowing costs.
Economists predict official figures on Tuesday will show GDP growth bounced back in the second quarter after a new-year slowdown.
Alongside fading worries about the Greek debt crisis and signs of rising living standards, any such recovery in headline growth could fan expectations that the Bank's policymakers are readying to raise interest rates, perhaps even before the end of the year.
Related: UK economic growth figures to ignite interest rate debate
8.04am BST
Britain is the first G7 country to release growth figures for the second quarter of 2015, so this morning's data will give an early hint of how the global economy is faring (we get growth figures for the US on Thursday)
7.51am BST
Good morning.
We're about to learn whether the UK economy strengthened in the last three months.
"Encouragingly, the gamut of the survey data suggests that GDP growth is likely to have improved significantly from the 0.4 per cent rate recorded in the first quarter."
We've rarely had it so good. Today's GDP data will confirm UK is enjoying its 3rd-longest spell of growth since 1955. pic.twitter.com/TSlRedG47Z
Breaking: BP swings to second-quarter loss on lower oil prices and Deepwater Horizon charge http://t.co/tYCeELTJqc
Warm weather prompts Next to boost forecasts http://t.co/fEhek7wkV4
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