PS: Don’t miss this piece on child poverty in the UK ; worth considering alongside today’s ‘encouraging’ GDP data:

That may be all for today, I think. I’ll be back if there’s any major news out of Greece. Otherwise, enjoy the afternoon..... GW

Greece has been given the green light to re-open its stock market, according to Bloomberg.

It’s almost a month since the Athens exchange was closed, when capital controls were implemented.

Those bailout talks in Greece have not got off to a great start:

Standard & Poor’s has issued a warning that monetary policy is diverging, in both major economies and developing ones.

The US is likely to raise interest rates in September, S&P reckons, followed by the Bank of England. In contrast, the European Central Bank is continuing to ease policy with its €60bn/month stimulus programme.

S&P senior economists Tatiana Lysenko predicts:

“Over the next 18 months, we expect tightening of monetary policy in Turkey and South Africa--the countries with large external deficits that are vulnerable to a reversal in global capital flows.

In Latin America, we expect both Brazil and Mexico to tighten monetary policy, albeit for different reasons.”

But banks in the Asia-Pacific are likely to ease policy. Ditto Russia, although this might not be possible if there is fresh turbulence in the currency market.

The decision on whether to raise UK interest rates will soon fall, in part, on the shoulders of economist Gertjan Vlieghe.

He’s just been named as the newest member of the Bank of England’s monetary policy committee.

Vlieghe, who starts in September, is currently a partner at hedge fund giant Brevan Howard. He’s previously worked at Deutsche Bank.

Vlieghe will be an ‘external’ member of the MPC, replacing David Miles. But he won’t need any help finding his way around the BoE - as he was once an advisor to former governor Mervyn King.

My colleague Katie Allen writes that while Britain’s economy is growing at a decent rate, the underlying picture is less cheery - with many people still finding the labour market tough:

The Bank of England’s chief economist, Andy Haldane, has warned about this as he makes the case for holding off a potentially damaging early interest rate rise.

“There are still people without a job who would like a job; there are still people with jobs who would like to work more hours. And, even for those that have got jobs, their pay – in most cases – isn’t racing away,” he told BBC Newsnight last week.

The latest analysis of what jobs are available gives yet more reasons for caution. Advertised salaries have fallen to an 11-month low, as growth in the workforce is driven by lower-paid roles and part-time positions, according to jobs search engine Adzuna.co.uk which aims to list every vacancy advertised.

These latest GDP figures underline the very British addiction to low-paid labour rather than more innovative and productive economic activity. For all the government’s pledges to rebalance the economy, the dominant services sector is the only part of Britain’s economy to be back to its pre-crisis peak.

Here’s Katie’s full analysis:

Chris Leslie MP, Labour’s shadow chancellor, fears Britain’s economy isn’t balanced enough to handle fresh problems in Europe and China, or a slowing world economy.

“The OBR has revised down productivity next year and for three years after that. Manufacturing is down by 0.3% and the Government is on course to miss its exports target by hundreds of billions of pounds.

“The Chancellor is complacent at a time when he should take action to support exporters and strengthen Britain’s infrastructure. Pulling the plug on major rail electrification and hitting households next April with a work penalty in the tax credit system are the wrong choices for the long term.”

Andrew Sentance, senior economic adviser at PwC, is also struck by how private sector service firms are leading the recovery, thanks to consumer spending.

Activity in retailing, hotels, restaurants and related services is 4.5% up on a year ago and the output of transport services has risen by 3.7%. Business and financial service growth in the past year is also over 3%.

Manufacturing output and public services are much more sluggish, with output growing by just 0.5% or so over the past year

Britain’s factories probably suffered from the weak European economy and stronger pound, says Jeremy Cook of World First:

“People are spending money because they feel more secure in their jobs and those jobs are starting to pay more than inflation is taking away.

“The environment for manufacturers is less pleasant. Despite the government’s pledges to drive a ‘march of the makers’ and reinvigorate the UK’s manufacturing sector, growth remains hard to come by.

“A 0.3% contraction can be chalked up to many things, but weakness in Europe and the overt strength of the pound will not be helping matters.

I now understand George Osborne’s motoring references:

The pound jumped when the GDP data was released, as traders anticipated that stronger growth made an interest rate rise more likely.

Sterling has gained half a cent against the US dollar today.

James Knightley of ING sums up the growth data:

The dominant service sector also grew 0.7% quarter-on-quarter, while there was also a strong contribution from the oil and gas industry.

However, manufacturing output fell 0.3% as a combination of the strong pound and weak export markets hurt activity. Construction output was flat on the quarter.

And with spare capacity being mopped up, the Bank of England could raise borrowing costs by early 2016:

We suspect that two members of the MPC may well vote for a rate hike in August although there may not be critical mass until February next year.

If Britain maintains its current growth rate, it could retain the title of fastest-growing G7 country.

Howard Archer of IHS Global Insight explains:

Growth of 2.6% in 2015 would likely make the UK, the fastest growing G7 economy as it was in 2014.

IHS currently forecasts GDP growth in 2015 of 2.2% in the US, 1.7% in Germany, 1.2% in France and 1.0% in Japan. We see overall Eurozone growth at 1.5% in 2015

After a slow start, Britain is the third-fastest growing member of the G7 since the financial crisis, behind Canada and the US:

These other countries will all report their GDP in the next few weeks - we get the US on Thursday, Canada on Friday, eurozone data on August 14, and Japan on the 17th.

Oil and gas extraction also made a positive contribution to growth, with output jumping by 7.8%.

The ONS say that may be due to tax cuts for the oil industry announced in March’s budget.

This is disappointing. Britain’s manufacturing sector shrank by 0.3% during the last quarter, dealing another blow to hopes of a “March of the Makers”.

In contrast, the business services and finance sub-sector grew by 0.8%.

I know we bang on about services being the ‘dominant’ part of the economy. But it’s true.

For all the talk of manufacturing revival, only the service sector is larger than its pre-crisis peak:

The total UK economy is now 5.2% higher than its pre-crisis peak in early 2008.

Once again, Britain’s service sector provided the bulk of the growth in the last quarter

Britain’s agriculture sector shrank by 0.7% during the quarter.

Here’s some detail:

Britain’s service sector grew by 0.7% during the last quarter, maintaining its dominant contribution to the economy.

Industrial output jumped by 1%.

Construction was flat, though, with no growth compared to Q1.

On an annual basis, the UK economy grew by 2.6% - down from 2.9% three months ago.

The pound is dipping a little as traders get edgy with 9.30am BST approaching.....

Ilya Spivak, currency strategist at DailyFX, also believes today’s growth data could put the Bank of England in the spotlight:

An upbeat result would reinforce recent comments from BOE officials expressing concerns about wage inflation and fuel speculation about oncoming tightening.

Needless to say, such a scenario is likely to bode well for the British Pound.

Which would be good news for Brits heading abroad for a summer holiday....

Just 30 minutes to go......

Back in the City, oil giant BP has fallen back into the red as the costs of the 2010 Gulf of Mexico disaster continue to mount.

My (new) colleague Graham Ruddick has the story:

There are a range of forecasts for today’s GDP reading - from a punchy 0.8% growth down to a mediocre 0.4%.

French bank Société Générale predicts that the UK economy grew by 0.6% in the last quarter - slightly lower than the City consensus of 0.7%.

Their global strategist, Kit Juckes, agrees that the Bank of England could soon hike borrowing costs.

The UK economy is trundling along, and with daily reports of shortages in the labour market, it is trundling closer to the rate lift-off.

Over in Greece, officials from its creditors have just been spotted arriving for today’s talks, according to AFP:

The FTSE 100 index of blue-chip shares has risen by 30 points in early trading, as investors await today’s GDP figures at 9.30am BST.

Insurance group RSA are leading the risers, soaring 10% after rival Zurich confirmed it might launch a bid.

Royal Mail, though, are the top faller - down 2.5% after regulator Ofcom suggested it was discriminating against rival delivery firms by charging unfairly high prices.

Today’s data may show that UK factories and builders struggled in the April-June quarter, while the service sector performed better.

From the Press Association’s preview:

Investec economist Chris Hare said the dominant services sector - representing three-quarters of output - was likely to do “most of the legwork” with the beleaguered construction and manufacturing industries set to have shrunk.

Scotiabank’s Alan Clarke said 0.7% was “probably the right call” but that monthly data published so far meant that any risks to this were skewed towards a slightly weaker rather than stronger outcome.

Today’s growth figures will also help decide when the Bank of England might start to hike borrowing costs.

My colleague Katie Allen explains:

Economists predict official figures on Tuesday will show GDP growth bounced back in the second quarter after a new-year slowdown.

Alongside fading worries about the Greek debt crisis and signs of rising living standards, any such recovery in headline growth could fan expectations that the Bank’s policymakers are readying to raise interest rates, perhaps even before the end of the year.

Here’s Katie’s GDP preview:

Britain is the first G7 country to release growth figures for the second quarter of 2015, so this morning’s data will give an early hint of how the global economy is faring (we get growth figures for the US on Thursday)