When you adjust for population changes, growth was less vigorous
The ONS reports that real GDP per head is estimated to have increased by 0.3% in Quarter 2 2024 – only half as fast as the headline growth rate for the quarter.
Real GDP per head is 0.1% lower compared with the same quarter a year ago.
GDP per head, or per capita, is commonly used as a broad measure of average living standards or economic well- being.
The UK economy has finally shaken off its slumber of recent years, says Ben Jones, lead economist at the CBI:
“After a strong performance in May, a slowdown in GDP growth was always on the cards for June. But a second successive quarter of above-trend growth suggests the UK economy has finally shaken off its slumber of recent years.
“We think the quarterly data probably overstates the underlying momentum in the economy, with recent CBI surveys of activity remaining fairly subdued. But firms nonetheless appear confident that the recovery will continue.
“After a challenging, few years, and ahead of the Autumn budget, the focus is shifting to the steps needed to raise the UK’s growth rate over the long-term. This could include the reforms set out in our recent business tax roadmap, which can incentivise private investment and together with a Net Zero Investment plan boost green growth, one of the fastest growing sectors in the country.”
This chart shows how the economy has hauled itself back to growth this year, after a grim 2023:
UK quarterly GDP growth rates Photograph: ONS
But, our economics correspondent RichardPartington points out that this year’s growth follows “a lacklustre performance over the past decade, while high living costs, elevated interest rates, and faltering productivity gains keep a lid on momentum”.
The chancellor, Rachel Reeves, has targeted rebooting the economy as Labour’s No 1 priority, arguing that stronger growth would help boost living standards and raise more tax revenue to repair battered public services.
The UK has now grown “strongly” for two quarters in a row, says ONS director of economic statistics Liz McKeown:
“The UK economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year.
“Growth across the three months was led by the service sector, where scientific research, the IT industry and legal services all did well.
“In June growth was flat with services falling, due to a weak month for health, retailing and wholesaling, offset by widespread growth in manufacturing.”
Today’s GDP report also shows the economy did not grow in June.
GDP showed no change in June, the Office for National Statistics reports, following growth of 0.4% in May.
Digging into the details… services output fell by 0.1% in June, while production output grew by 0.8% in the month, and construction output grew by 0.5%
Newsflash: The UK economy grew by 0.6% in the second quarter of the year, as it continues to pull away from last year’s shallow recession.
That’s a slight slowdown on the first quarter, where the economy expanded by 0.7%, but still a healthy growth rate – and in line with expectations.
The Office for National Statistics reports that the services sector drove growth, while the production sector and construction both shrank slightly.
GDP is estimated to have grown 0.6% in Quarter 2 (Apr to June) 2024, following growth of 0.7% in Quarter 1 (Jan to Mar).
Services (+0.8%) grew while production (-0.1%) and construction (-0.1%) both contracted.
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How strongly, or weakly, was the UK economy growing at the end of Rishi Sunak’s premiership?
We’ll find out shortly, when GDP data for June – and for the second quarter of 2024 – are released.
City economists predict the UK posted a quarter of solid growth. GDP is forecast to have grown by 0.6% in April-June, which would be a slight slowdown on the 0.7% recorded in January-March.
But in June alone, the economy may have stalled – with no growth forecast.
Sanjay Raja, chief UK economist at DeutscheBank, says the service sector was driving activity in the last quarter:
On our calculations, the services economy will likely bounce up by 0.7% q-o-q – despite expected contractions in both the production and construction sectors over the same quarter.
On the expenditure side, we expect government spending, business investment, inventories, and net acquisitions to provide the bulk of the lift to quarterly GDP.
The strength – or otherwise – of the UK economy will also influence how soon the Bank of England feels confident to cut interest rates again, after inflation rose by less than expected in July:
