LONDON—The U.K. economy performed better than previously thought in the period surrounding the nation's referendum on membership of the European Union, according to a fresh batch of economic data Friday that will be welcomed by the country's ruling Conservative Party ahead of its annual conference this weekend.

The British economy grew faster in the second quarter than earlier estimates suggested, while the country's powerhouse services sector posted strong growth in the month immediately following the June vote, the U.K.'s Office for National Statistics said.

The data suggest the economy may perform better than expected in the second half of the year, although officials at the Bank of England and many economists still expect growth to slow next year as uncertainty over the U.K.'s future ties to its largest trading partner weigh on spending and investment.

The ONS said that in its final estimate of second-quarter growth the U.K. economy grew at an annualized rate of 2.7%, up from an earlier estimate of 2.4%. The revision was driven by fresh data showing stronger growth in the services sector than previously thought and higher business investment. Business investment grew 1% on the quarter, the ONS said, compared with an earlier estimate of 0.5% growth.

The services sector—which accounts for some 80% of the U.K.'s annual output—also performed better in July than expected. The sector grew 0.4% on the month, led by gains in retail, cinemas and transport and communications. Surveys of activity published over the summer suggested services-sector output shrank in July.

Friday's data "tend to support the view that there has been no sign of an immediate shock to the economy, although the full picture will continue to emerge," said Darren Morgan, head of gross domestic product statistics at the agency.

The BOE in August cut its benchmark interest rate to a new low as part of a package of measures to support the economy following the surprise decision to exit from the EU. Officials telegraphed that another rate cut would follow this year, but will be watching the data closely to judge whether further stimulus is still needed.

There was worse news Friday on the U.K.'s current-account deficit, the gap between its earnings from overseas and foreigners' earnings in the U.K. The deficit widened in the second quarter to 5.9% of annual national income, from 5.7% in the first quarter. The deterioration was due, in part, to a widening in the trade deficit and an increase in remittances overseas.

Write to Jason Douglas at jason.douglas@wsj.com and Wiktor Szary at Wiktor.Szary@wsj.com

(END) Dow Jones Newswires

September 30, 2016 05:35 ET (09:35 GMT)

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