The UK economy’s growth during the spring was not as strong as previously thought, according to revised official figures from the Office for National Statistics (ONS). The ONS reported that gross domestic product (GDP) had increased by 0.5% between April and June, down from the initial estimate of 0.6%. The growth was primarily led by the services sector, while the manufacturing and construction industries had a negative impact on the overall figure, the ONS indicated. Despite this slight adjustment, the UK economy continued its recovery from the recession at the end of last year, though at a slightly slower pace.
A technical recession requires two consecutive quarters of negative growth, but the figures showed that GDP had actually grown by 0.7% in the first quarter of the year, between January and March, which marked the end of a short recessionary period. Looking back at 2023, the ONS revised the GDP growth for the year to be 0.3%, up from the initial estimate of 0.1%. This increase was attributed to stronger income data, including employee pay and business profits, which contributed positively to the overall economic performance.
Liz McKeown, the director of economic statistics at the ONS, noted the inclusion of new annual survey data, VAT returns, and updated industry size information in the latest GDP figures. She highlighted that while there were enhancements made, the growth trajectory over the past 18 months remained largely unchanged. Household savings were also on the rise, with the household saving ratio reaching 10% in the latest quarter, up from 8.9% at the beginning of the year, indicating that more disposable income was being saved by individuals.
Recent data showed that the economy had stagnated, with no growth recorded in both June and July. Chancellor Rachel Reeves acknowledged the challenging economic environment, stating that two quarters of positive growth were insufficient to offset years of stagnation. She emphasised the need for sustained efforts to drive meaningful change and economic progress.
As the UK navigates these economic fluctuations, policymakers are likely to closely monitor developments and consider targeted interventions to support growth and stability across various sectors.