UK Economic Growth Driven By Service Sector

Despite aims to increase the UK’s industrial output since the last recession, the UK is still heavily reliant on the service sector for growth as industrial output slumps.

The UK’s industrial output slumped against expectations according to the latest figures released by the Office for National Statistics (ONS). The news will come as a blow to the UK’s manufacturing firms which had been expected to contribute to growth in the economy.

Unfortunately it appears that the burden again rests with the volatile service sector. Heavy reliance on the service sector and an imbalance in the economy was seen as a reason for the UK’s struggle to grow its way out of the last recession.

Industrial output in June slumped 0.4% following a 0.3% increase in May which wipes out any gains in that two month period. One bit of good news was the 0.2% increase in manufacturing output in June even if this didn’t reverse the 0.6% drop reported in May.

A variety of external factors are to blame for falling industrial output including the growing strength of the Pound, the uncertainty in Europe during the threat of a Greek exit and a fall in oil and gas production.