Economy  

UK economy grew 0.6% in second quarter of 2024

UK economy grew 0.6% in second quarter of 2024
Growth in the second quarter of 2024 was driven by the services sector. (Jason Alden/Bloomberg)

GDP grew by 0.6 per cent in the three months to June.

It follows an increase of 0.7 per cent in the first quarter of 2024 and could signal further interest rate cuts from the Bank of England, according to experts. 

Growth was driven by the services sector which was up 0.8 per cent. Within this, the largest contributor was a 2.5 per cent increase in the professional, scientific and technical activities subsector.

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The Office for National Statistics said compared with the same quarter a year ago, GDP is estimated to have increased by 0.9 per cent this year. 

Neil Birrell, chief investment officer at Premier Miton Investors, said: "The second quarter seems like a long time ago, but the GDP data confirms that the UK economy is in good health.

"The Bank of England is in the nice position, unlike other central banks, of having a level of surety in the data it is seeing, when setting policy. With inflation playing ball as well, the path to lower interest rates looks to be set, the timing of the cuts is now the focus."

While Luke Bartholomew, deputy chief economist at Abrdn, said the report confirms the economy has had a strong recovery from its mid technical recession at the end of 2023. 

He said: "Growth may slow a little in the second half of the year, as rises in real incomes continue to gradually come down.

"Interestingly, the UK seems to be in a very different part of the cycle than the US, where the economy is cooling after a very strong 2023.

"This helps to explain some of the difference in urgency around monetary policy easing in the two countries, with the Fed likely to be more active in cutting rates later this year than the Bank of England.

"But with UK services inflation finally starting to moderate sharply, there is certainly space for the BoE to also cut rates again this year.”

tara.o'connor@ft.com

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