Final data published by the Office for National Statistics (ONS) showed that GDP grew by 0.5% in Q2, slowing compared to Q1 (+0.7%). Economists had expected the economy to expand by 0.6%. On an annual basis, GDP grew by 0.7% after increasing by 0.3% in the first three months of 2024. Consensus estimates suggested GDP growth of 0.9%.
The ONS said that in the 2nd quarter, the growth was driven by a 0.6% QoQ increase in services output while production and construction fell. The data showed widespread growth in the services sector, with 10 out of 14 subsectors increasing in the 2nd quarter. The largest contributor to the growth in services output was a 2.9% increase in information and communication. Overall, non-consumer-facing services (business-facing services) grew by 0.9% in Q2, while consumer-facing services fell by 0.3%, following growth of 0.6% in Q1. The production sector is estimated to have fallen by 0.3% in Q2 (revised from -0.1%). Within production, manufacturing was the largest negative contributor (-0,7%), with 7 out of the 13 manufacturing subsectors showing falls in the latest quarter. Construction output has fallen by 0.2% (previously a 0.1% fall), the third consecutive quarterly fall. The data also showed that real household expenditure increased by 0.2%, unrevised from the first estimate. Within household consumption, the largest contributions to the growth were from transport, housing and miscellaneous.