The UK economy grew by 0.5% in June, according to figures released by the Office for National Statistics (ONS). This is the third consecutive month of growth, and the strongest since March 2023.
The ONS said that the main drivers of growth in June were the production and construction sectors. Production output grew by 1.8%, the largest monthly increase since March 2020. Construction output grew by 1.1%, the strongest monthly growth since January 2023.
The services sector also grew in June, but by a more modest 0.2%. This was the weakest monthly growth for the services sector since February 2023.
The ONS said that the increase in GDP in June was partly due to the additional bank holiday in May. However, it also said that there were signs of underlying strength in the economy.
For example, the ONS said that business investment grew by 0.9% in the three months to June, the strongest quarterly growth since March 2023. This suggests that businesses are becoming more confident about the future and are investing in their operations.
The ONS also said that the number of people in employment increased by 100,000 in the three months to June, the largest quarterly increase since March 2023. This suggests that the labor market is still strong, despite rising unemployment.
Overall, the figures for June suggest that the UK economy is on a solid footing. However, there are some risks to the outlook, such as rising inflation and the ongoing war in Ukraine.
What does this mean for the UK economy?
The increase in GDP in June is a positive sign for the UK economy. It suggests that the economy is recovering from the COVID-19 pandemic and is on a path to sustainable growth.
However, there are some risks to the outlook, such as rising inflation and the ongoing war in Ukraine. Inflation is currently at a 40-year high, and it is expected to continue to rise in the coming months. This could put a squeeze on household budgets and businesses' bottom lines.
The war in Ukraine is also a major risk to the UK economy. The war has caused energy prices to surge, and it has disrupted global supply chains. This could lead to slower growth in the UK economy in the coming quarters.
Despite these risks, the increase in GDP in June is a positive sign for the UK economy. It suggests that the economy is on a solid footing, and it is well-placed to withstand the challenges ahead.
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