"The recession of late 2023 seems a long time ago"
The UK economy continued to expand in the second quarter of 2024, with gross domestic product (GDP) increasing by 0.6% compared to the preceding three-month period, according to data released by the Office for National Statistics (ONS) on Thursday.
Monthly GDP was flat in June 2024, following a 0.4% rise in May.
The services sector, which accounts for a significant portion of the UK economy, saw output decline by 0.1% in June, after growing 0.3% in May. However, the sector posted a 0.8% growth over the three months to June 2024.
Production output rose by 0.8% in June, up from a revised 0.3% increase in May, though it contracted by 0.1% over the quarter.
Construction output grew by 0.5% in June, following a downwardly revised 1.7% rise in May, but also declined by 0.1% in the three-month period ending in June.
GDP is estimated to have grown 0.6% in Quarter 2 (Apr to June) 2024, following growth of 0.7% in Quarter 1 (Jan to Mar).
— Office for National Statistics (ONS) (@ONS) August 15, 2024
Services (+0.8%) grew while production (-0.1%) and construction (-0.1%) both contracted.
Read GDP first quarterly estimate, UK ➡️ https://t.co/h1NTYmpipY pic.twitter.com/cOj8VlAp6x
In February, ONS reported that the UK economy had entered a technical recession, with GDP declining for two consecutive quarters — between June and September 2023, and again between October and December 2023. However, the economy rebounded in the first quarter of 2024, with GDP growing by 0.6% in the three months to March.
“The UK economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year,” said Liz McKeown, ONS director of economic statistics, commenting on the latest GDP figures.
“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.”
Nicholas Hyett, investment manager at Wealth Club, said the month-on-month GDP figures showing no overall growth were in line with economists’ expectations.
“The weakness in the all-important services sector reflects a slowdown in the retail sector as well as strikes by junior doctors, though the professional services sector remains resilient and is now in its fifth consecutive month of growth,” he noted.
“Positive signs in the manufacturing and construction sectors bode well for the future, given the longer lead times in these sectors. Increased activity implies rising economic confidence with the potential to sustain longer term economic growth.
“However, the crucial number from a political point of view is the quarterly growth figure – and at 0.6%, it’s pretty healthy. With potential for interest rate cuts to stimulate activity in the second half of the year, the recession of late 2023 seems a long time ago.”
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