The UK economy grew by 0.5% between April and June 2024, slightly below the previously estimated 0.6%, according to revised official figures from the Office for National Statistics (ONS).
The downward revision was driven by larger-than-expected declines in the manufacturing and construction sectors.
Notably, production in transport-related equipment fell by 3.1%, reflecting reduced output in car manufacturing as the industry transitions to electric vehicles.
Additionally, construction activity was hampered by a continuing downturn in the building of new homes, though there are signs of a gradual recovery.
These revised figures come as the Labour government prepares to unveil its first Budget in four weeks.
Prime Minister Sir Keir Starmer has warned of a “painful” Budget, while Chancellor Rachel Reeves has sought to offer a more optimistic outlook, stating that the UK’s “best days lie ahead.”
Economic growth has been a central focus of the government’s policy agenda.
Paul Dales, chief UK economist at Capital Economics, commented that the slight revision is not a major concern and is unlikely to significantly affect the Bank of England’s view on the economy.
However, it may reinforce the Bank’s recent decision to cut interest rates, which in August dropped to 5% from 5.25%—the first reduction in nearly four years—as inflation has begun to ease.
The ONS also revised economic growth for 2023 upwards, from 0.1% to 0.3%, citing stronger income data and updates on industry performance.
Meanwhile, the household savings ratio rose to 10% in the spring, its highest level since the Covid-19 lockdowns, reflecting more cautious consumer behavior.
Also read: UK House Prices Surge By 3.2% In September, Driven By Terraced Homes
