The UK economy grew by 0.6% between April and June 2024, continuing its recovery following a brief recession at the end of last year. This growth matched forecasts and follows a 0.7% increase in the year’s first quarter.
The expansion was largely driven by the services sector, particularly IT, legal services, and scientific research. Services remain the primary contributor to the UK’s economy, far outpacing manufacturing and construction, both of which saw output decline during the period.
Liz McKeown, director of economic statistics at the Office for National Statistics (ONS), noted that the economy had grown robustly for two consecutive quarters, marking a rebound from the weaker performance in the latter half of 2023. The recession in question was shallow and short-lived, with the economy contracting for two consecutive quarters last year.
Despite overall growth, June saw no expansion, partly due to strike action by junior doctors, which led to nearly 62,000 cancelled NHS appointments.
While the services sector bolstered the economy over the quarter, it hindered growth in June. Economists caution that growth may slow in the second half of 2024, despite a recent interest rate cut to 5%, the first reduction in four years, by the Bank of England(BoE).
Following Labour’s election victory, Prime Minister Sir Keir Starmer has pledged to “take the brakes off Britain” with new policies to boost housing and infrastructure development. It is expected that the BoE will cut interest rates further this year to support growth.
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