--UK Q2 provisional GDP unrev +0.3% vs Q1; unrev +2.1% on yr
--UK Q2 total services rev up to +0.8% vs Q1; +3.5% on year
--UK Q2 household spending up 1.2% on Q1; up 3.7% on year
--UK Q2 production sector output down 1.1% vs Q1; down 1.7% on yr
--UK Q2 mfg sector output dn 2.0% vs Q1; dn 1.3% on yr
--UK Q2 domestic demand up 0.3% vs Q1; up 2.4% on year
--UK Q2 inventories 1 mln stlg vs Q1 1.414 bln stlg
--UK Q2 GDP market price deflator +0.5% on qtr, +2.0% on yr
--UK Q2 compensation of employees up 0.5% on qtr, up 5.6% on yr
--ONS: UK Q2 employee compensation qtrly rise lowest since Q1 '93
--ONS: UK Q2 services rev up on communications, retail, wholesale

London, August 22 (BridgeNews) - U.K. gross domestic product growth in the second quarter was unrevised at up 0.3% on the previous quarter and up 2.1% on the year. There were few unexpected revelations in the provisional estimate published Wednesday. The only notable feature was an upward revision to services output, which was pushed up to a quarterly rate of 0.8% from 0.6% and an annual rate of 3.5% from 3.4%. The ONS said it reflected stronger estimates for communications, retail and wholesale output.
Revisions aside, the data clearly highlights the yawning split between services and manufacturing sectors, with the manufacturing sector posting its weakest quarterly performance since the first quarter of 1991. It fell 2.0% on the previous quarter and fell 1.3% on the same quarter a year earlier.
Elsewhere, domestic demand slowed fairly abruptly to a quarterly rate of 0.3% from a quarterly rate of 0.8% in the first quarter. It was the same rate as in the fourth quarter of last year. Household spending, however, remained robust, accelerating to a quarterly rate of 1.2% from 0.6% in the first quarter. The change in inventories, estimated at only 1 million sterling in the second quarter compared with 1.414 billion sterling in the first quarter, reduced the quarterly growth rate by 0.7 percentage points, the ONS said. The ONS said the decline in the stocks of raw materials in the manufacturing sector had cut inventory levels but this was offset by increases in construction, motor and retail sectors. The alignment adjustment, which aims to square the different measures of GDP, reduced the change in inventories over the quarter but not significantly, the ONS said.
The trade deficit had no meaningful effect on GDP growth as it was roughly the same size as in the previous quarter.
The figures will do little to alter the monetary policy debate. The economy appears to be slowing but there remains uncertainty about the resilience of the consumer sector. Economists are divided over the prospects for another interest rate cut this year and say that much depends on developments elsewhere in the world. End Copyright 2001 Bridge Information Systems Inc. All rights reserved.