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Construction boosts UK economy

Record-breaking figures have been announced on UK construction’s recent quarterly performance.

Output was re-calculated to stand at 9.5 per cent, from an initial 8.5 per cent. This is the building sector’s fastest rate of growth since 1963.

The sector’s recovering strength helped prop up UK GDP to a surprising overall growth rate of 1.2 per cent, which has not been seen since 2001.

The figures were issued by the Office for National Statistics and cover the three months between April and June.

However, this growth will not continue, analysts said. The second-quarter performance will actually be the peak of any recovery and coupled with massive Government cuts, soon to be announced in the spending review on October 20, the next direction for the economy is likely to be downwards.

Capital Economics Jonathan Loynes said: “With income set to come under further pressure over the coming quarters as the fiscal squeeze bites, there are clear doubts over whether households can carry on spending like they did in Q2.

“Overall, there are still very good reasons to be cautious over the sustainability of the economic recovery.”