The UK financial system expanded at a a lot quicker charge than initially estimated in 2023, in keeping with revised information from the Workplace for Nationwide Statistics (ONS).
The up to date figures present that the financial system grew by 0.3% final yr, triple the beforehand reported 0.1% progress.
This upward revision follows the gathering of extra detailed information on wages and company earnings. Regardless of the better-than-expected efficiency, the UK remained one of many slowest-growing economies within the G7, with solely Germany faring worse by contracting 0.1% throughout the identical interval.
The improved financial outlook is prone to gas criticism of the Labour authorities’s claims of inheriting the worst financial state of affairs from the earlier Conservative administration since World Struggle II. Nevertheless, the ONS additionally revised down GDP progress for the second quarter of 2024 to 0.5%, a slight lower from the sooner estimate of 0.6%, highlighting challenges for the financial system as Sir Keir Starmer took workplace in July.
The Organisation for Financial Co-operation and Improvement (OECD) forecasts that the UK financial system will develop by 1.1% this yr, indicating modest restoration. Gora Suri, an economist at PwC, famous that whereas GDP progress for the second quarter was barely beneath preliminary estimates, the broader financial outlook has improved as a result of decrease inflation, declining rates of interest, and elevated political stability following the final election.
Actual GDP per head, thought-about a greater measure of residing requirements, rose by 0.2% within the three months to June, though it stays 0.3% decrease than throughout the identical interval final yr. In the meantime, disposable incomes elevated by 1.3% within the second quarter, down from a 1.6% rise within the earlier quarter.
The family financial savings ratio additionally noticed a notable improve, reaching 10% within the second quarter, up from 8.9% within the first quarter, in keeping with the ONS.
Liz McKeown, Director of Financial Statistics on the ONS, defined that the revised GDP figures for 2023 and 2024 embrace new annual survey information, VAT returns, and up to date business dimension estimates. Nevertheless, she famous that the general progress trajectory for the final 18 months stays largely unchanged.
The ONS has confronted earlier criticism for underestimating the power of the UK’s restoration post-Covid, and considerations have been raised in regards to the accuracy of its labour market information as a result of a decline in survey response charges.
