Commenting on the latest ONS GDP data, Jake Finney, economist at PwC, says:
“The latest growth statistics provide more evidence that the economy is gradually turning a corner as the new government takes office. UK real GDP expanded by 0.6% in the second quarter of 2024, powered by strong growth in the services sector, despite the fact that activity flatlined in June.
“There is good reason to expect that the second half of 2024 will be strong too, given that wages are growing in real terms and the Bank of England has started to loosen monetary policy. Our modelling indicates that the economy will grow by 1% across 2024 as a whole, up from 0.1% last year. Though even this could be an underestimate, if there is an upturn in consumer spending as the economic climate improves.
“However, there is still some way to go if the government is to meet its ambitious target to become the fastest-growing G7 economy on a sustained basis. It will be difficult for the government to achieve that without addressing the post-pandemic rise in economic inactivity. Our analysis indicates that reincorporating this group into the workforce could boost economic growth by as much as a quarter of a percentage point a year, if done over a ten year period.”
The latest PwC UK Economic Outlook can be seen here.
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