Britain’s economy grew more slowly in the second quarter than previously expected, but there were some signs of improvement in household finances ahead of next month’s annual budget.
The National Bureau of Statistics said on Monday that economic output grew 0.5% between April and June.
The data was slightly weaker than the initial estimate for gross domestic product growth of 0.6% and below economists’ forecasts for another 0.6% growth.
Gora Suri, an economist at PwC, said: “UK GDP growth in the second quarter of this year was slightly lower than initially expected, but overall the UK economic outlook has improved significantly since the beginning of the year. “
“This is largely the result of inflation returning to target, interest rates starting to fall, and increased political stability following the election.”
The British household savings rate rose from 8.9% in the first three months of this year to 10.0% in the second quarter. Gross domestic product per capita increased for the second consecutive quarter, but the growth rate slowed down from the first quarter.
Prime Minister Keir Starmer’s Labor Party won power in July and is seeking to accelerate economic growth.
Finance Minister Rachel Reeves suggested some tax increases in the first budget on October 30, but she also hinted she might change fiscal rules public debt, which could pave the way for more borrowing and help boost investment and economic growth.
The Bank of England expects economic growth to slow to 0.3% in the third quarter of 2024, but said signs of its first interest rate cut in August and expectations of further interest rate cuts, coupled with falling inflation, will boost economic growth later this year.
The Office for National Statistics said the economy grew by 0.7% compared with the second quarter of 2023, below the 0.9% growth forecast by economists.
The pound was little changed against the dollar after the data was released.
Overall economic growth in 2023 was revised upward to 0.3%, slightly stronger than the previous forecast of 0.1%, reflecting updated ONS data.
But the economy is still considered to have contracted in the third and fourth quarters of last year, meeting the technical definition of a recession.
separate data Published on Monday It shows that the annual increase in UK house prices in September was the largest since November 2022, up 3.2% from the same month last year.
