- UK GDP grew 0.3% in the three months to June, but growth has slowed since the first quarter of the year
- June’s GDP grew by 0.4%, with all sectors showing growth
- April’s 0.3% fall in GDP has been upwardly revised to a 0.1% fall
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK GDP figures:
“Whether you are a cup half empty or a cup half full type of person will determine how you view this latest set of UK growth figures.
“The economy has continued its positive trajectory and grew by more than had been expected in the three months to June, despite a challenging backdrop – not least from the government’s own actions on business taxation. But that growth has slowed significantly from the 0.7% charge at the start of the year and even the most charitable can’t consider the pace as anything other than sluggish, especially when you factor in population growth.
“For Rachel Reeves today’s figures will provide a welcome boost as she draws up her Budget plans, with promises that she is looking for ways to go further and faster when it comes to stimulating the economy. The government put growth at the top of its agenda, so expansion in the construction sector will provide a glimmer of hope that at least some of its plans are beginning to bear fruit.
“The slowdown had been anticipated as the threat of tariffs became reality in April, which spurred many manufacturers to front load production. Trump’s Liberation Day shock forced some businesses to temporarily halt lines, but a favourable trade agreement has enabled output to pick up again as June showed growth in all sectors including manufacturing.
“Despite shaky consumer confidence, the service sector delivered the biggest boost to June’s figures. This was helped along by balmy temperatures which tempted people to visit beer gardens and ice cream parlours.
“The question now is whether growth can be sustained in the face of speculation about tax rises in the autumn, which could further undermine flagging business sentiment.”
