UK Economy Grows 0.4 Per Cent as Momentum Slows
The UK economy grew by 0.4 per cent between April and June, official figures showed, with output rising an unexpected 0.3 per cent in June alone. The Office for National Statistics said growth was driven by the services sector, though it slowed from the pace set at the start of the year. The pound dipped on the release as investors weighed the softer momentum.
The reading offers a mixed picture for the government: the economy is still expanding, and June’s surprise uptick suggests underlying resilience, but the slowdown from the previous quarter points to a loss of momentum as higher energy prices from the Iran conflict bite. Services, from hospitality to professional firms, did the heavy lifting, helped by a warm early summer and a lift in consumer spending, while industrial production stayed weak. For Chancellor John Healey, the numbers are just firm enough to argue the recovery is holding, but soft enough to keep pressure on ahead of an autumn budget shadowed by tight finances. The pound’s dip reflected bets that a cooling economy leaves room for lower interest rates. Watch how the figures shape the budget and the Bank of England’s next move.