UK economic growth weaker than first thought over spring, figures show

The Office for National Statistics said GDP increased by 0.5% between April and June, revised down from an initial estimate of 0.6%

Growth across the UK's economy turned out to be more sluggish than initially thought over the past spring, with revised figures from the Office for National Statistics (ONS) indicating that gross domestic product (GDP) rose by a mere 0.5% between April and June, a slight decrease from the preliminary estimate of 0.6%.

The increase was powered predominantly by an uptick in the services sector, while manufacturing and construction activities lagged, pulling down the headline number, the ONS revealed. These numbers suggest that the UK's economic upswing from the recession at last year’s end continues, though not as robustly as earlier estimates suggested.

A technical recession is categorized as two successive quarters of negative growth. The ONS showed unrevised data stating that GDP saw a 0.7% increment in the first quarter, spanning January through March, consequently marking the close of that brief recessive spell.

For the entirety of 2023, the ONS now projects GDP grew by 0.3%, a revision upwards from an original forecast of 0.1%, thanks to stronger income statistics including higher earnings for workers and increased business profits. Liz McKeown, the ONS's director of economic statistics, stated: "Today’s updated GDP figures for 2023 and 2024 include new annual survey data, VAT returns and updated information about the relative size of each industry for the first time."

She added, "However, after taking on these improvements, the quarterly growth path across the last 18 months is virtually unchanged. Our latest data show that household savings continue to increase and are now at their highest rate since the Covid-19 lockdowns."

The household saving ratio is estimated at 10% in the latest quarter, up from 8.9% over the start of the year, meaning people were keeping more of their disposable income locked into savings. More recent data shows that the economy has been flatlining, with no growth recorded in both June and July.

It prompted Chancellor Rachel Reeves to say she was "under no illusion about the scale of the challenge" the country faces, and that "change will not happen overnight". "Two quarters of positive economic growth does not makeup for 14 years of stagnation," she added.