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The UK economy grew by 0.6 per cent in the second quarter of 2024, aligning with expectations as it recovers from last year’s mild recession. The latest data from the Office for National Statistics (ONS) indicates a slight deceleration from the 0.7 per cent growth seen in the first quarter, with the expansion largely driven by the service sector, which saw an increase of 0.8 per cent.
Despite the quarterly growth, the economy showed no change in June, following a 0.4 per cent rise in May. The services sector faced a slowdown, particularly in retail, which saw a one per cent decline. Meanwhile, both the production and construction sectors contracted by 0.1 per cent.
Liz McKeown, ONS director of economic statistics, highlighted the strong performance across the services sector over the three months. However, growth stagnated in June due to challenges in health, retailing, and wholesaling, despite gains in manufacturing.
Ben Jones, lead economist at the Confederation of British Industry (CBI), noted that while a June slowdown was anticipated, consecutive quarters of robust growth suggest the UK economy may be emerging from years of sluggish performance.
Real GDP per head, a measure of average living standards, rose by 0.3 per cent in the second quarter, half the headline growth rate, and slightly lower than last year.
This economic update is part of a series of indicators being closely watched by the Bank of England, as policymakers consider whether to adjust interest rates in the coming months. Recent data revealed a slight increase in inflation to 2.2 per cent in July, while unemployment has unexpectedly decreased, signalling potential shifts in the labour market.
Chancellor Rachel Reeves emphasized the government’s focus on economic growth, acknowledging the challenges inherited from previous years and reaffirming the commitment to rebuilding Britain’s economy.
