According to data published by the Office for National Statistics on Thursday, the level of British gross domestic product in June was unchanged compared to the previous month, which also matched analysts’ expectations. However, compared to the previous year, the economy’s performance showed an increase of 0.7%.
“These figures confirm that the UK’s recovery from recession gathered momentum in the second quarter, despite activity being dampened in June by strikes and wet weather,” said Suren Thiru, chief economic officer at the Institute of Chartered Accountants in England and Wales. But he added that he expects growth to slow in the second half of 2024 due to several factors.
The Bank of England (BoE) earlier this month raised its annual growth forecast for 2024 from 0.5% to 1.25%, thanks to a stronger-than-expected start to the year. However, the central bank is less optimistic about the rest of the year: it expects expansion of 0.4% in the third quarter and just 0.2% in the final quarter.
The UK economy has performed very poorly since the outbreak of the Covid-19 pandemic. Between the fourth quarter of 2019 and the second quarter of 2024, it expanded by just 2.3%. Among advanced economies, only Germany performed worse.
According to Finance Minister Rachel Reeves, the latest figures clearly show the challenge facing the new government. She reiterated her position that tough decisions must be made to improve economic fundamentals.
The long-term growth prospects of the UK economy are limited by several factors. In addition to lower business investment, leaving the EU also has a negative impact on performance.Per capita output in the second quarter of 2024 was 0.1% below the previous year and 0.8% below pre-pandemic levels.
Source: Reuters
Cover image is an illustration. Cover image source: Getty Images
