UK recession 'can still be avoided' as GDP grows 0.2% in Q2
'The BoE has an incredibly difficult job to do, and with next year likely to see a general election at the same time, they will not want to overcorrect and tip the balance of power one way or another.'
The ONS also adjusted figures for Q1, resulting in an uplift to the original estimate of 0.1%, to 0.3%.
Growth in Q2 was largely driven by a 1.2% increase in the production sector, experiencing rises in nine out of its 13 sub-sectors, while also reflecting falling input prices across the three-month period relieving pressure on manufacturers.
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Chancellor of the Exchequer Jeremy Hunt said the ONS data published today (29 September) proved the doubters wrong about the UK economy's ability to recover from Covid-19.
«We were among the fastest countries in the G7 to recover from the pandemic and, since 2020, we have grown faster than France and Germany. The best way to continue this growth is to stick to our plan to halve inflation this year, with the IMF forecasting that we will grow more than Germany, France and Italy in the longer term,» Hunt added.
Richard Carter, head of fixed interest research at Quilter Cheviot, said the GDP quarterly accounts «give some hope that a recession can still be avoided by the UK», at least in 2023.
He also noted the ONS' revision of Q1 GDP data meant that, although challenging, economic growth «is not quite non-existent for the UK».
Cater continued: «We are also seeing shoots that the cost of living crisis may be easing for households. While expenses are still elevated compared to pre-pandemic periods, disposable incomes are beginning to move ahead, bringing relief to many households who will have struggled over the winter months
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