The UK economy grew by 0.6% in the second quarter of the year, marking a slight slowdown from the first quarter but still in line with expectations. The services sector drove growth, while the production and construction sectors saw a slight contraction. Real GDP per head increased by 0.3% in Q2, lower than the headline growth rate of 0.6%. Despite no growth in June, the UK has now experienced two consecutive quarters of strong growth. Anecdotal evidence suggests pre-election uncertainty and industrial action may have impacted economic activity in June.
The Chancellor, Rachel Reeves, has emphasized the need to reboot the economy, with the opposition party focusing on raising growth rates to improve living standards and public services. The Bank of England is considering potential interest rate cuts as inflation remains under control, with the economy in good health.
While growth has improved in 2024, it follows a lacklustre decade marked by high living costs and faltering productivity gains. The challenge now is to raise long-term growth rates, potentially through business tax reforms and green growth initiatives. The UK economy is slowly recovering from past stagnation, with a focus on sustaining growth momentum in the future.
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