Agencies
Britain’s economy grew more slowly than previously thought in the second quarter, revised official data showed Monday, dealing another early blow to new Prime Minister Keir Starmer and his Labour government.
However, there were also some signs of improvement in household finances ahead of next month’s annual budget.
Economic output expanded by 0.5% in the April-to-June period, the Office for National Statistics (ONS) said on Monday. The reading was slightly weaker than a preliminary estimate for a 0.6% growth in gross domestic product (GDP) and was below economists’ forecasts for another 0.6% rise.
“The U.K.’s GDP grew by slightly less than originally estimated in the second quarter of this year, but overall the U.K. economic outlook has improved considerably since the start of the year,” said Gora Suri, an economist at PwC.
“This is largely the result of inflation being back to target, interest rates starting to come down and greater political stability post-election.” Britain’s household saving ratio increased to 10% in the second quarter, up from 8.9% in the first three months of the year, and GDP per capita rose for a second quarter in a row, albeit more slowly than in the first quarter.
Britain’s Labour government has made growing the U.K. economy a priority after winning national elections at the start of July but has been knocked off course during its first few months in office by strained economic data and highly controversial decisions taken by Starmer.
Britain’s economy had grown 0.7% in the first quarter following a shallow and short-lived recession in the second half of last year.
However, U.K. inflation remains above the Bank of England’s target rate, slowing its journey to cutting interest rates.
