The UK economy grew by 0.6% in the second quarter of the year, following a slight slowdown from the first quarter but still in line with expectations. The growth was primarily driven by the services sector, while the production and construction sectors saw slight contractions. Compared to the same period last year, real GDP increased by 0.9%.
The data suggests that the UK economy was near the front of the G7 pack as the new government took office, with Japan leading in growth at a rate of 3.1%, followed by the US and the UK. Chancellor Rachel Reeves emphasized the government’s commitment to economic growth as a national mission, aiming to make every part of the country better off.
Economists expect strong growth in the second half of the year, with real GDP expanding by 0.6% in the second quarter powered by the services sector. Factors such as wage growth and looser monetary policy by the Bank of England are expected to further boost the economy.
However, pre-election uncertainty and industrial action may have impacted growth in June, with businesses delaying orders until the election outcome was known. The GDP report also indicates that the economy stagnated in June, with services output falling slightly.
Despite these challenges, the UK economy has shown strong growth for two consecutive quarters, with the service sector leading the way. The path to lower interest rates looks set, and policymakers are focused on measures to raise the UK’s long-term growth rate.
Overall, the UK economy has shown signs of recovery after a period of sluggish growth, and the government is focusing on policies to build a stronger and more resilient economy.
Source
Photo credit www.theguardian.com