Britain says in position of economic strength for Brexit talks

Gross domestic product (GDP) grew 0.6 per cent in the second quarter, the Office for National Statistics (ONS) said in a first estimate for April-June, which included the shock EU exit vote towards the end of the period.

That beat market expectations for 0.5-per cent growth, as activity was boosted by rebounding industrial production, and followed 0.4-per cent expansion in the first quarter.

“GDP figures show that the fundamentals of the British economy are strong,” said finance chief Hammond.

“In the second quarter of this year our economy grew by 0.6 per cent -- faster than was expected. “Indeed we saw the strongest quarterly rise in production for nearly twenty years, so it is clear we enter our negotiations to leave the EU from a position of economic strength.” 

Britons had voted on June 23 to leave the European Union in a surprise vote that sent markets tumbling and the pound slumping in its aftermath.

Also on Wednesday, European Commission head Jean-Claude Juncker appointed veteran French politician and former EU commissioner Michel Barnier to lead the exit negotiations with Britain.

Juncker said Barnier was a “skilled negotiator with rich experience in major policy areas relevant to the negotiations (and) ... has an extensive network of contacts.” 

Conservative Prime Minister Theresa May, whose predecessor David Cameron resigned after losing the referendum, has already signalled however that London will not be rushed into EU exit talks -- 

and will most likely will begin the negotiations early next year.

“Those negotiations will signal the beginning of a period of adjustment, but I am confident we have the tools to manage the challenges ahead, and along with the Bank of England, this government will take whatever action is necessary to support our economy and maintain business and consumer confidence,” added Hammond on Wednesday.

British economic activity in the second quarter was driven by particularly strong growth in industrial production -- which expanded by 2.1 per cent.