UK economic system grows by 0.2%, ONS figures present

The UK economic system grew barely within the three months to June, in accordance with official estimates.

Gross home product (GDP) elevated by 0.2% within the second quarter of the yr, the Office of National Statistics (ONS) stated. In June alone it rose 0.5%.

It comes after a fee of 0.1% was recorded within the first quarter, the bottom quantity potential to nonetheless be classed as progress.

Experts stated the economic system had bounced again in June following a dip the earlier month, when an additional financial institution vacation was held to have fun the King’s coronation.

Darren Morgan, the ONS’s director of financial statistics, added: “Manufacturing noticed a very sturdy month with each vehicles and the often-erratic pharmaceutical business seeing notably buoyant progress.

“Services also had a strong month with publishing and car sales and legal services all doing well, though this was partially offset by falls in health, which was hit by further strike action.

Read more: Cost of living – latest: GDP figures released

“Construction additionally grew strongly, as did pubs and eating places, with each aided by the new climate.”

The Bank of England has forecast that the UK will probably keep away from recession in 2023 however recommended the economic system will successfully flatline for the following few years.

It not too long ago hiked rates of interest for the 14th time in a row to five.25% because it makes an attempt to convey down inflation.

The fee of inflation fell by a bigger-than-expected drop in June however nonetheless stays excessive at 7.9%.

Chancellor Jeremy Hunt advised Sky News final week that the UK, together with Europe, the US, Canada and Japan, have been “all in a low growth trap that we need to get out of”.

He added: “What you’ll see from me in the autumn statement is a plan that shows how we break out of that low growth trap and make ourselves into one of the most entrepreneurial economies in the world.”

‘Strong foundations’

The new knowledge places the UK on a greater course to keep away from recession, which is outlined as two quarters in a row when GDP shrinks, this yr.

But there are nonetheless issues in regards to the longer-term outlook for the economic system. A report by thinktank the National Institute of Economic and Social Research warned earlier this week there was a “60% risk” of a recession in 2024.

It stated the UK was additionally set to expertise 5 years of “lost” financial progress, whereas “elevated housing, energy and food costs” would probably proceed into subsequent yr.

ONS publishes GDP knowledge each month, which goals to measure the sum complete of all the pieces produced within the economic system.

However the indicator has confronted criticism for failing to incorporate some elements of the economic system, such because the contribution of unpaid carers.

Commenting on the most recent figures, Mr Hunt stated: “The actions we’re taking to fight inflation are starting to take effect, which means we’re laying the strong foundations needed to grow the economy.

“The Bank of England are actually forecasting that we’ll keep away from recession, and if we persist with our plan to assist individuals into work and enhance enterprise funding, the IMF have stated over the longer-term we’ll develop quicker than Germany, France and Italy.”