UK economy grows again but slows

As reported by BBC News, the UK’s economy grew by 0.6% this quarter, but concerns linger over a potential slowdown

The latest figure was in line with forecasts and follows a 0.7% increase in the first three months of this year.

Growth was led by the services sector, in particular the IT industry, legal services, and scientific research.

Services are the biggest contributor to the UK’s economy, far outstripping manufacturing and construction, both of which saw output fall between April and June.

“The UK economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year,” said Liz McKeown, director of economic statistics at the Office for National Statistics, which released the figures.

While gross domestic product (GDP) – a key measure of all the economic activity of companies, governments, and people – expanded over the latest quarter, growth was flat in June.

While the services sector helped economic expansion over the three months, it was a drag on performance in June alone.

Strike action by junior doctors affected growth. NHS England reported that 61,989 appointments were canceled because of industrial action by junior doctors between 27 June and 2 July.

Economists also warned that growth might slow in the second half of 2024.

Anna Leach, chief economist at the Institute of Directors, said businesses were reporting modest activity for the summer months “no doubt affected by still high interest rates.”

Earlier in August, the Bank of England trimmed interest rates to 5% in its first cut in four years.

“The challenge for government is to firmly lift the UK’s growth performance out of the doldrums,” said Ms. Leach.

“There are no quick fixes here: we’ll need the government to follow through on its manifesto commitments to set and stick with long-term infrastructure investment plans.”