The UK’s economy grew by 0.6% between April and June, marking the second consecutive quarter of recovery following a brief recession at the end of last year.
This growth, which aligns with forecasts, builds on the 0.7% expansion seen in the first quarter.
The recovery was driven by the services sector, with notable contributions from the IT industry, legal services, and scientific research.
These sectors remain the primary drivers of the UK economy, far outpacing the manufacturing and construction industries, both of which saw output decline during the same period.
Liz McKeown, Director of Economic Statistics at the Office for National Statistics, noted that “the UK economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year.”
This period of growth follows a shallow and short-lived recession in 2024, defined by two consecutive quarters of economic contraction.
Despite the overall quarterly growth, June’s performance was flat, largely due to disruptions in the services sector.
Strike action by junior doctors was a significant factor, with NHS England reporting nearly 62,000 canceled appointments between June 27 and July 2.
Looking ahead, economists warn that growth may slow in the second half of 2024.
Anna Leach, Chief Economist at the Institute of Directors, observed that businesses are experiencing modest activity during the summer months, likely impacted by still-high interest rates.
Earlier in August, the Bank of England cut interest rates to 5%—its first reduction in four years—in response to these concerns.
Leach emphasized the need for sustained government action, stating, “The challenge for government is to firmly lift the UK’s growth performance out of the doldrums.
There’re no quick fixes here: we’ll need the government to follow through on its manifesto commitments to set and stick with long-term infrastructure investment plans.”
Chancellor Rachel Reeves acknowledged the magnitude of the task ahead, saying, “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.”
However, Shadow Chancellor Jeremy Hunt pointed to the GDP figures as “further proof that Labour has inherited a growing and resilient economy.”
As the UK navigates these economic headwinds, business leaders and policymakers alike must focus on building a sustainable and resilient growth trajectory, balancing immediate challenges with long-term vision.
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