GDP grows faster than expected as spending increases
An upward revision in how the UK economy performed at the start of the year is likely to be a talking point in the last days of the general election campaign.
Fresh data show that the nation’s GDP – a measure of the amount of goods and services the UK produced – grew by 0.7 per cent in the first three months of the year.
And with households seemingly saving more in recent months, some believe there is extra
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spending power to help improve growth further. The figures, released by the Office for National Statistics, mean there was better growth than the initial estimate for that period, which had chalked up a 0.6 per cent performance. It also suggests that the UK exited the shallow recession it experienced at the end of last year in a stronger fashion than was thought.
But, with recent data also showing that GDP was flat in April, caused in part by poor weather and a Bank Holiday, political parties are likely to claim that their respective plans are needed to put the economy on a more steady footing.
“The household saving ratio was 11.1 per cent, up from 10.2 per cent in the final three months of last year, showing there is still room for a much stronger recovery in consumer spending than most expect,” said independent economist Julian Jessop on X.
Torsten Bell, the former chief executive of The Resolution Foundation, who is standing as a Labour candidate in the Swansea West constituency, said the data showed that households are worse off than they were at the start of this parliament. However, the Prime Minister, Rishi Sunak, has said he has helped to bring inflation down to 2 per cent, the Bank of England’s target rate.