Copy article

Latest figures show GDP growth of 0.5% in Q2

ended 01. October 2024

The UK economy grew by 0.5% in the second quarter (April to June) according to official data published this morning. What impact, if any, could this have on monetary policy? Will this make a cut in November more likely?

Here are the main points from the Office for National Statistics data:

  • GDP grew by 0.5% in Q2
  • GDP for 2023 as a whole is estimated to have increased by 0.3%
  • Services grew by 0.6% in Q2 2024 with widespread growth across the sector
  • Real households' disposable income (RHDI) is estimated to have grown by 1.3% in Q2

Drop your views below.

5 responses from the Newspage community

Copy all

Copy

Editor
Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
The UK economy hits unexpected turbulence, with the latest GDP data revised down from previous estimates, providing a sobering reminder of the challenges ahead. This latest data paints a picture of a recovery losing steam, with the economy showing no growth in July due to falls in the production and construction sectors. For many, this will feel like a bucket of cold water on the embers of economic optimism, with the road to recovery becoming longer than previously hoped. The weaker figures indicate that the economy is showing less resilience than anticipated, with speculation that the BoE may need to recalibrate its monetary position and accelerate its dovish stance in line with its US counterparts. Sterling will likely face downward pressure as investors reassess the UK's trajectory and domestically reliant equities may experience heightened volatility. However, this may encourage policymakers to recalibrate current positioning to foster growth and reignite economic confidence.
Copy

Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
Positive signs that the economy is showing growth despite constant talk of doom and gloom, even though the 0.5% growth was slightly down on previous estimates. Of course all these gains could be wiped out in one foul swoop when the Autumn budget is given in a months time, so let's celebrate the wins whilst we can.
Copy

Premium
Prem Raja
Head of Trading Floor at Currencies 4 You
After a disappointing GDP release on Monday morning, GDP grew by 0.5% (A downward revision from 0.6% growth). The majority of growth was from the UK services sector, with manufacturing and production still lagging, so though the UK is clawing it's way back from recession, it is happening a lot slower than initially anticipated. From a monetary policy perspective, I do not think this release sways the BoE's decision at all, lower interest rates will fuel growth as lending becomes cheaper, especially for the manufacturing sector, so a rate cut in November is 100% on the cards in my view, but right now it is unclear on whether it will be a 25 bps or 50 bps cut.
Copy

Graham Cox
Director at Bridging Hub
Second quarter GDP growth of 0.5% is a bounce back of sorts, almost doubling growth seen in the whole of 2023. However these figures don't tell the whole story, as you'd expect GDP to grow with a fast rising population. GDP per capita is a better bellweather. The truth is the UK economy is limping along. A base rate cut in November is desperately needed.
Copy

John Castle
Tax & Financial Planning Consultant at Tax Planning Solutions
Despite still being the 6th largest economy in the world, UK growth has been woefully disappointingly for many years. Coupled with recent high levels of inflation, most household budgets have suffered as a consequence.

Moneteray policy is just one aspect to consider. Yes, lower interest rates may well be on the way and these can help with reducing the cost of borrowing for all, including the Government itself. However, without a credible policy for achieving ecomnomic growth, none of us will be feeling financially better off.

Being able to seperate fact from fiction would be a good starting point. One minute, we're told that there is a £22bn black hole, the next we hear that the new chancellor has a £39bn surplus to play with.

The Autumn budget will undoubtably have huge ramifications for us all. Will we invest for growth or tax and spend? Either way, our future prosperity is at stake.