August 26, 2006	Saturday	Sha'aban 1, 1427

LONDON, Aug 25: Britain’s economy grew at its fastest rate in two years during the second quarter, compared with the first three months of 2006, unrevised official data showed on Friday.

Gross domestic product (GDP) grew by 0.8 per cent during the three months to June 30 compared with the first quarter, the Office for National Statistics confirmed.

The figure, which marks the fastest quarterly rate of growth since the second quarter of 2004, was unrevised from last month’s initial estimate.

On a 12-month basis, the economy grew at a rate of 2.6 per cent in the second quarter compared with the same period in 2005, again unrevised from July’s estimate.

The annual growth rate was also the highest since the fourth quarter of 2004. Both growth numbers tallied with analysts’ consensus forecasts.

The ONS added that household expenditure rose by a two-year high of 1.0 per cent during the second quarter, up on the 0.3 per cent increase in the previous three months.

On a year-on-year basis, household expenditure was 2.4 per cent higher on the same quarter in 2005, up on the first quarter’s equivalent of 1.5 per cent.

However, Royal Bank of Scotland economist Ross Walker said that there were signs that GDP growth would ease in the third quarter.

“The economy grew at its fastest rate for two years in the second quarter, driven by a surge in consumer spending,” he said.

“This momentum is unlikely to be sustained in the third quarter -- we have already seen a fall in retail sales in July -- and a positive contribution to GDP growth from net trade remains elusive despite buoyant exports.”—AFP