The UK’s economy has shown signs of recovery after a mild recession in the latter half of 2023, according to recent data from the Office for National Statistics (ONS). The economy has experienced growth for two consecutive quarters, with a 0.6 percent increase between April and June following a 0.7 percent growth in the first quarter of this year.
Liz McKeown, Director of Economic Statistics at the ONS, described this growth as strong and significant, particularly considering the weakness of the economy at the end of last year. She highlighted that the service sector played a crucial role in driving this growth, with industries such as scientific research, IT, and legal services performing well.
In addition to overall economic growth, workers have also seen an increase in their pay. Average weekly earnings have risen by 2.8 percent compared to the same period last year. This wage growth can be attributed partly to low inflation and an improving economy.
However, experts caution that challenges still lie ahead. Hetal Mehta, an economist at Legal & General Investment Management, pointed out that uncertainty surrounding Brexit is causing businesses to hesitate on investments and consumers to reduce spending – both factors vital for sustained economic growth.
Mehta also noted that much of the GDP growth is due to increased working hours rather than improvements in productivity. Andrew Wishart from Capital Economics agreed with this assessment and stressed that businesses need to invest in technology to enhance productivity.
Recognizing these challenges, Chancellor Rishi Sunak welcomed the positive news but emphasized that there is more work ahead. He stated that it is crucial to continue supporting economic growth and create favorable conditions for businesses’ success in order to achieve a robust and enduring recovery.
