Britain’s economy has extended the recovery from recession last year after recording growth of 0.6% in the three months to June.
Figures from the Office for National Statistics (ONS) show gross domestic product (GDP) continued to grow in the second quarter, after growth of 0.7% in the first three months of 2024. City economists had forecast growth of 0.6%.
Liz McKeown, the ONS director of economic statistics, said: “The UK economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year.
“Growth across the three months was led by the service sector, where scientific research, the IT industry and legal services all did well.”
Despite the quarterly rise in activity, figures for June showed zero growth month on month, amid a washout summer for retailers as cold and wet weather deterred shoppers from spending.
“We think the quarterly data probably overstates the underlying momentum in the economy, with recent CBI surveys of activity remaining fairly subdued. But firms nonetheless appear confident that the recovery will continue,” said Ben Jones, lead economist at the CBI lobby group.
According to the latest snapshot, service sector output increased by 0.8% in the second quarter, powered by scientific research and development. There was also strength in the IT, transport, legal, architecture and engineering sectors.
Consumer-facing service output fell by 0.1%, reflecting the weaker period for purchases of physical goods amid the cost of living crisis and poor weather hitting retail sales. Manufacturing and construction output also fell.
The UK has grown at a faster pace this year than many forecasters predicted, in a development likely to be seized on by the shadow chancellor, Jeremy Hunt, as evidence that the previous government had helped the economy to turn a corner.
However, it comes after a lacklustre performance over the past decade, while high living costs, elevated interest rates, and faltering productivity gains keep a lid on momentum.
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The chancellor, Rachel Reeves, has targeted rebooting the economy as Labour’s No 1 priority, arguing that stronger growth would help boost living standards and raise more tax revenue to repair battered public services.
“The new government is under no illusion as to the scale of the challenge we have inherited after more than a decade of low economic growth and a £22bn black hole in the public finances,” Reeves said.
“That is why we have made economic growth our national mission and we are taking the tough decisions now to fix the foundations, so we can rebuild Britain and make every part of the country better off.”