UK economy grows 0.6 per cent in second quarter, in line with expectations
The UK economy grew in line with expectations in the second quarter of 2024, as it continued to bounce back from a shallow recession.
Britain’s gross domestic product (GDP) grew 0.6 per cent in the three months to June compared to the previous quarter, according to data from the Office for National Statistics (ONS).
The figure matched economists’ forecasts and marked a slight slowdown on the 0.7 per cent expansion seen in the first quarter.
Growth in the second quarter was driven by the key services sector, which expanded 0.8 per cent, while production and construction both contracted 0.1 per cent.
On a monthly basis, the economy showed no growth in June – in line with expectations – following a 0.4 per cent expansion in May. June saw improvements in manufacturing output offset by a slowdown in construction and contraction in services.
Within services, high street and wholesale retailers recorded a one per cent drop for the month.
“The UK economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year,” said ONS director of economic statistics Liz McKeown.
“Growth across the three months was led by the service sector, where scientific research, the IT industry and legal services all did well.
“In June growth was flat with services falling, due to a weak month for health, retailing and wholesaling, offset by widespread growth in manufacturing.”
Ben Jones, lead economist at the Confederation of British Industry (CBI), commented: “After a strong performance in May, a slowdown in GDP growth was always on the cards for June. But a second successive quarter of above-trend growth suggests the UK economy has finally shaken off its slumber of recent years.”
Real GDP per head, commonly used to measure average living standards, increased by 0.3 per cent in the second quarter, just half the headline growth rate and 0.1 per cent lower than the same quarter last year.
Thursday’s data is among a raft of economic figures released this week that will provide key indicators for Bank of England policymakers as they decide whether to cut interest rates in September.
ONS numbers published on Wednesday showed inflation moved away from the Bank’s two per cent target to hit 2.2 per cent in July – the first increase this year but below economists’ expectations of 2.3 per cent.
On Tuesday, data showed unemployment fell unexpectedly in the three months to June while a slowdown in wage growth to its lowest level in more than two years added to signs that the jobs market is cooling.
Chancellor Rachel Reeves said on Thursday: “The new government is under no illusion as to the scale of the challenge we have inherited after more than a decade of low economic growth and a £22bn black hole in the public finances.
“That is why we have made economic growth our national mission and we are taking the tough decisions now to fix the foundations, so we can rebuild Britain and make every part of the country better off.”