The UK economy grew broadly in line with forecasts during the second quarter of the year, official figures showed today.

Gross domestic product (GDP) rose 0.9% on the previous quarter - higher than the 0.7% increase recorded in the first three months of the year.

The figures from the Office for National Statistics were slightly lower than analysts' predictions of a 1% rise.

It means that GDP grew 3.7% year-on-year, as forecast by experts.

The increase was largely due to a surge in output from the production industries, including a rise in manufacturing output.

This included significant rises in the machinery and equipment, metal and transport equipment sectors.

Output from the services industries was also 0.9% ahead - leaving it at the same level as the previous quarter.

Within this, retail, hotels and restaurants were estimated to have grown by 1%, while sectors such as business services and finances also increased.

Output from transport and communication grew more strongly than in the first quarter, mainly due to an increase in post and telecommunications.

Friday July 23, 2004