GDP growth could see UK being strongest G7 economy in 2024, ‘but comes with a twist’ – London Business News | Londonlovesbusiness.com

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 and production rose 0.8% month-on-month.

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

John Choong, Head of Equities and Markets at Investors Edge said, “The UK economy continues to roar back to life after a harsh winter in 2024 saw the economy enter a recession.

“This puts Britain on track to be the G7’s star pupil, potentially outpacing even the mighty US economy if it can continue to keep up its current pace of growth.

“This is a testament to the nation’s economic resilience in the face of global headwinds and high interest rates. However, this success story comes with a twist. The MPC might now be less inclined to ease up on interest rates.

“After all, there’s little to no reason to cut interest rates if the economy is already doing so well, with inflation just hovering slightly above its 2% target as well. Nonetheless, this leaves businesses and homeowners in a peculiar position of celebrating growth while having to brace for continued high borrowing costs.”

Wes Wilkes, CEO at Net-Worth NTWRK said, “The British ‘stiff upper lip’ looks to be playing out in our growth numbers. 0.6% growth for the three months to June is excellent news and the UK economy seems to be thriving rather than coping, despite the flat growth in June.

“This is certainly shaming our European neighbours and even giving our star spangled friends from across the pond something to think about.

“As with every drama, there is always a second act. While this data and a growing UK economy in the second quarter overall is to be celebrated, this does give the Bank of England and the Monetary Policy Committee a lot of thinking to do and may be more reason to pause and wait before taking more action on interest rates. That could be a blow to borrowers.”