The British economy grew at a brisk rate of 0.6% during the second quarter of the year, official figures show today.
It was the second consecutive quarter of respectable GDP growth following a 0.7% advance in the first quarter.
The bounce back came after a shallow recession in the second half of last year.
However, today’s data from the Office for National Statistics (ONS) showed that GDP flatlined in June, when the high street was hit by heavy rain and a junior doctor’s strike brought chaos to the health service.
The dominant services sector grew by 0.8% for the second quarter running.
It completes a third consecutive day of promising economic figures from the ONS. Tuesday’s labour market figures showed the slowest growth in wages for two years while yesterday’s July inflation data revealed underlying price pressure easing although the headline rate went up slightly from 2% to 2.2%.
Tomorrow sees retail sales figures expected to show a sharp recovery from the 1.2% decline in June.
ONS Director of Economic Statistics Liz McKeown said: “The UK economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year.
“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.”
Chancellor of the Exchequer, Rachel Reeves, said “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 £22 billion 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.”
Jeremy Batstone-Carr, European Strategist, Raymond James Investment Services said: “Today’s quarterly GDP data showsthat the UK economy has maintained the growth momentum achieved at the beginning of the year, growing by 0.6%. This marks a further departure from the shallow recession of late 2023 and provides a valuable tailwind for the newLabour administration.
“Admittedly, June’s lackluster outturn, the consequence of junior doctors’ strikes and lower retail sales volumes, has removed some of the gloss. However, services activity didn’t dry up altogether as the weather improved and construction activity strengthened.“This offset a more subdued performance from the industrial and manufacturing sectors after a strong May. “
Ben Jones, lead economist at the CBI: “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.
“We think the quarterly data probably overstates the underlying momentum in the economy, with recent CBI surveys of activity remaining fairly subdued. But firms nonetheless appear confident that the recovery will continue.”
