Sluggish UK economy inches forward, Bank of England unlikely to act

LONDON (Reuters) - Britain's economy failed to build much momentum over the past three months after almost stalling at the start of the year, reducing an already slim chance that the Bank of England will soon reverse last year's emergency interest rate cut.

Economic output grew by 0.3 percent on the quarter, edging up from a sluggish rate of 0.2 percent in the first quarter, as a booming film industry and bright spots elsewhere in the services sector were largely offset by contractions in manufacturing and construction.

The figure was in line with the median forecast in a Reuters poll of economists and capped the weakest first half to any year since 2012.

Finance minister Philip Hammond said the economy was "steady" and that more certainty about how Britain will leave the European Union in less than two years' time would help spur economic growth.

Sterling edged down against the U.S dollar after the data was released and British share prices rose.

"To me, this is the final nail in the coffin for an August rate hike," said Alan Clarke, head of European fixed income strategy at Scotiabank.