UK GDP up April - June 2023

UK economy grows June 2023

U.K. economy beat expectations with 0.2% growth in the second quarter, boosted by household consumption and manufacturing output, the Office for National Statistics said Friday.

Economists had expected U.K. GDP to level off in the second quarter, after a surprise increase of 0.1% in the first quarter, as the Bank of England’s monetary policy tightening took effect and as persistent inflation began to slow consumer demand.

The economy expanded by 0.5% in June 2023, beating a forecast of 0.2% growth. It follows monthly GDP growth of 0.1% in May and 0.2% in April. However, the strength of the June rise was partially attributed to warm weather, as well as the additional public holiday in May to celebrate the coronation of King Charles III.

Better than expected

GDP was lifted by 1.6% growth in manufacturing and 0.7% in production in the second quarter, while services grew by 0.1%.

The Office for National Statistics (ONS) noted strong growth in household and government consumption in terms of expenditure. Both faced price pressures in the quarter, though this moderated from the previous three-month period.

UK GDP up in June 2023
Growth in June 2023 was stronger than expected at 0.5%

Growth in June 2023 was stronger than expected at 0.5%, showing a recovery when the economy lost one working day due to the national holiday in May. June’s warm weather also benefited the construction industry as well as pubs and restaurants. But the economy was impacted by strike action by NHS workers, doctors, railway unions and teachers. However, the figures for the three months and June in particular were better-than-expected.

What does it mean?

Gross Domestic Product (GDP) is one of the most important tools for looking at the health of the economy, and is watched closely by the government and businesses. If the figure is increasing, that means the economy is growing and people are doing more work and getting a little bit richer, on average.

But if GDP is falling, then the economy is shrinking which can be bad news for businesses. If GDP falls for two quarters in a row, it is typically defined as a recession.

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