'Better than expected' UK GDP grows 0.5% in June
'The Bank of England is now forecasting that we will avoid recession.'
The figures published by the Office for National Statistics today (11 August) follow a 0.1% dip in May and a 0.2% increase in April, after no signs of growth were reported between March and May 2023.
The ONS has estimated monthly GDP to be 0.8% above its pre-Covid levels in February 2020.
The increased output for June was attributed to the additional bank holiday in May, according to several businesses. Production output grew 1.8% after falling 0.6% in May, making it the biggest contributor to GDP growth over the month.
The other three main sectors also posted rises. Construction was up 1.6% after a 0.3% dip in May; services output increased by 0.2% in June after showing no growth the previous month; and output in consumer-facing services increased by 0.5% from a 0.2% fall in May.
UK GDP dips 0.1% in May
Commenting on the ONS figures, Chancellor Jeremy Hunt said the actions the government has been taking to fight inflation «are starting to take effect, which means we are laying the strong foundations needed to grow the economy».
He added: «The Bank of England is now forecasting that we will avoid recession, and if we stick to our plan to help people not work and boost business investment, the IMF have said over the longer-term, we will grow faster than Germany, France and Italy.»
However, Marcus Brookes, CIO at Quilter Investors, noted the UK still remains on recession watch, with the National institute of Economic and Social Research earlier this week forecasting five years of economic stagnation for the country, despite «better than expected GDP numbers this morning».
«This all puts the Bank of England in a difficult period right now», he said.
Read more on investmentweek.co.uk
