UK economic growth was weaker than thought in the quarter to June, official figures showed today.
GDP expanded by 0.5 per cent over the three months, slightly less than the ONS’s initial estimate of 0.6 per cent.
The manufacturing and construction industries industry were the biggest drag on the headline rate. The news could give both the Bank of England and Chancellor Rachel Reeves pause for thought, as the former considers interest rate cuts and the latter draws up her Budget.
The official figures showed that Brits have been racking up savings at the fastest pace since Covid – potentially a sign of nerves about the prospect for the economy and taxes.
Fears were raised during the election campaign about the burden rising, and since Labour took power in July Keir Starmer and Ms Reeves have been giving stark warnings about pain to come.
The latest ONS data showed that the UK economy continued its recovery from recession at the end of last year, albeit at a slightly slower pace than previously thought.
GDP increased by 0.7 per cent over the first quarter, between January and March, unrevised figures showed.
ONS Director of Economic Statistics Liz McKeown said: ‘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.
‘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.’