UK economy grows in line with expectations in Q2

The latest data on the UK’s economy reveals a steady recovery in the second quarter of 2024, with GDP growing by 0.6%, consistent with economists’ predictions.

This growth builds on a stronger 0.7% rebound in the first quarter of the year, following a shallow recession during the latter half of 2023.

While the month-on-month GDP figure remained unchanged in June, which was expected due to various disruptions such as strike actions and adverse weather, the annual growth rate stands at 0.7%.

The figures indicate that the UK economy has managed to maintain its recovery momentum into the second quarter, even in the face of challenges.

However, there are growing concerns that this momentum may not last into the second half of the year.

The Bank of England’s recent interest rate cut, although intended to provide relief, has left rates still near a 16-year high, which could dampen further growth.

Additionally, persistent supply constraints and slower wage growth are expected to act as headwinds, potentially leading to a slowdown in economic activity as the year progresses.

Economists are cautiously monitoring these factors, as they could weigh on consumer spending and business investment, making it more difficult for the UK to sustain its current pace of recovery.