UK Economy Shows Signs of Recovery

a { color: #880000 !important; background: #ffeeee !important; } Latest NewsUK Economy Shows Signs of RecoveryEconomic Analysis > EconomyThe UK economy grew by 0.6% in Q2 2024, continuing its recovery from a recession at the end of 2023. Growth was driven by the services sector, particularly IT and legal services, despite a flat performance in June. The new Labour government aims for sustained growth amid challenges ahead.

What's happened

The UK economy grew by 0.6% in Q2 2024, continuing its recovery from a recession at the end of 2023. Growth was driven by the services sector, particularly IT and legal services, despite a flat performance in June. The new Labour government aims for sustained growth amid challenges ahead.

What's behind the headline?

Economic Growth Overview

The UK economy expanded by 0.6% between April and June 2024, following a 0.7% increase in the previous quarter.
Growth was primarily driven by the services sector, particularly in IT, legal services, and scientific research.

Challenges Ahead

Despite positive growth, June saw no economic expansion, indicating potential weaknesses in consumer spending.
High inflation and interest rates remain concerns, with the Bank of England expected to adjust rates in response to economic conditions.

Government Response

Chancellor Rachel Reeves emphasized the need for sustained growth to improve public finances and living standards.
The Labour government faces a significant challenge in maintaining momentum while addressing a projected fiscal deficit.

What the papers say

According to the BBC, the UK's economy grew by 0.6% in Q2 2024, marking a recovery from last year's recession. Liz McKeown from the Office for National Statistics noted that growth was led by the services sector, particularly in IT and legal services. However, The Guardian cautioned that growth in June was flat, suggesting consumer fatigue and potential challenges ahead. The Independent highlighted that while the UK has recorded the fastest growth in the G7, sustaining this momentum will be difficult, with experts warning of a slowdown in the latter half of the year. The New York Times pointed out that the positive growth figures might provide some relief to the new Labour government, which is under pressure to deliver on economic promises.

How we got here

The UK economy fell into a shallow recession in late 2023, prompting concerns about its recovery. Recent data indicates a rebound, with GDP growth of 0.7% in Q1 2024 followed by 0.6% in Q2, suggesting a positive shift in economic conditions.

Go deeper

What sectors are driving the UK's economic growth?
How is the government planning to sustain this growth?
What challenges does the UK economy face moving forward?

Common question

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