UK economy races forward 0.2%, ONS figures show
According to new figures released by the Office of National Statistics (ONS), inflation rates slowed in June thanks to increased household spending.
Today, the ONS positively revealed that the UK economy has grown by 0.2% between April and June as warm temperatures prompted more people to spend money in pubs and restaurants. In addition, more money was put into the construction industry which also helped to boost figures.
However, despite the optimistic news, the UK economy still remains 0.2% smaller than it was in the final quarter of 2019, before the onset of the Covid-19 pandemic triggered the deepest recession since records began.
Darren Morgan, an ONS director of economic statistics, said: ‘The economy bounced back from the effects of May’s extra bank holiday to record strong growth in June. Manufacturing saw a particularly strong month, with both cars and the often-erratic pharmaceutical industry seeing particularly buoyant growth.
‘Services also had a strong month, with publishing and car sales and legal services all doing well, though this was partially offset by falls in health, which was hit by further strike action. Construction also grew strongly, as did pubs and restaurants, with both aided by the hot weather.’
The cost-of-living has been driven by the highest inflation rates seen in the last four decades, with it peaking at 11.1% in October last year. Since then, rates have gradually reduced and there was some sign of a pickup in consumer-facing services in the second quarter.
Sridhar Lyengar, managing director for Zoho Europe, said: ‘The past year has thrown yet another curveball at businesses with economic disruptions, so it is positive to see signs of optimism with the recent economic growth in the UK.
‘The pandemic highlighted that to weather external market forces, businesses should be open to change, be agile and flexible in their use. And, of course, fostering a culture of innovation should be at the core.’
As well as the weather helping to drive up the UK economy, the Bank of England has continuously increased interest rates and has recently hiked them up to 5.25% in a bid to avoid the country from going into a recession.
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