Households have shown increased spending on restaurants and transportation, resulting in a 0.7% increase in real household expenditure during the quarter. However, the UK’s post-pandemic recovery is still significantly lagging behind other wealthy nations.
According to Samuel Tombs, chief UK economist at Pantheon Macroeconomics, the UK is the only G7 country where the main quarterly measure of GDP has yet to reach its pre-Covid levels. Quarterly GDP remains 0.2% below its pre-pandemic level. In contrast, the US experienced a 6.2% increase in quarterly GDP during the same period, and even Germany, which is currently in recession, saw a 0.2% growth.
The strong growth in June can be attributed mostly to sectors that are sensitive to changes in working days. These sectors were disproportionately affected by the extra bank holiday in May, as explained by Mr. Tombs.
Ruth Gregory, deputy chief UK economist at Capital Economics, issued a warning that the June boost may be misleading. She stated that since the rise was mostly due to the return to the normal number of working days in June after the bank holiday for the King’s Coronation in May, the economy may appear stronger than it actually is.
Ms. Gregory further predicts that the Bank of England’s rate hikes will have a delayed impact on the economy, leading to a fall in GDP in Q3 and ultimately resulting in a mild recession.
Across the quarter, services output increased by 0.1%. This growth was primarily driven by the information and communication sector, specifically the film and TV production industry, which saw a 1% increase. Accommodation and food services also experienced a significant jump of 1.6%, boosted by favorable weather conditions and live events.
On the other hand, the scientific sector faced a setback, with a decline of 1% driven by decreases in research and development, dealing a blow to Chancellor Jeremy Hunt’s ambitions of transforming Britain into a science and tech powerhouse.
The mining and quarrying sector continued its decline for the fifth consecutive month, plunging by 4.3% due to decreases in oil and gas extraction.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
