UK GDP - Recession Looks A Long Time Ago

15th August 2024

UK GDP showed no growth month-on-month in June, following 0.4% growth in May, with quarterly growth of 0.6%.

The monthly result reflects a modest fall in services output, offset by growth in both Production and Construction.

Services output fell 0.1% month-on-month.

Construction output rose 0.5% month-on-month.

Production rose 0.8% month-on-month.

GDP had been expected to remain flat month-on-month (Trading Economics).

Nicholas Hyett, Investment Manager, Wealth Club, "The month-on-month GDP figures were in line with economists expectations - showing no overall growth. The weakness in the all important services sector reflects a slow down in the retail sector as well as strikes by junior doctors, though the professional services sector remains resilient and is now in its fifth consecutive month of growth.

Positive signs in the manufacturing and construction sectors bode well for the future, given the longer lead times in these sectors. Increased activity implies rising economic confidence with the potential to sustain longer term economic growth.

However, the crucial number from a political point of view is the quarterly growth figure - and at 0.6% its pretty healthy. With potential for interest rate cuts to stimulate activity in the second half of the year, the recession of late 2023 seems a long time ago."

Wealth Club