- UK economy grew by 0.1% more in the first quarter of the year than had been previously reported
- Consumers feeling less constrained as real household disposable income rose 0.7%
- The service sector provided the biggest boost but construction weighed
Danni Hewson, AJ Bell head of financial analysis, comments on revised UK GDP figures:
“It’s the tiniest sliver of improvement but when it comes to UK GDP growth, every little really does help.
“Figures had already confirmed that the country had plodded out of recession at the start of 2024, now the ONS has confirmed that plod had a little more pace. It matters, especially as the nation weighs up what it wants from the next government.
“Growth has been front and centre of party manifestos, even if they differ on the details of how that growth can be achieved.
“A growing economy creates wealth, puts more money in people’s pockets and ups the amount of tax delivered to the Treasury’s depleted coffers.
“And households are finally feeling less squeezed with real disposable income up 0.7%, cash that’s being spent at hairdressers, bars, restaurants and in stores.
“But there are concerns, particularly within the sluggish construction sector; little wonder then that housebuilding has been a key battleground over the past few weeks.
“And whilst 0.7% is higher than growth seen in other G7 countries in the first quarter of the year there are questions about how sustainable even that sluggish pace really is.
“April’s downpours stalled progress and, whilst warmer weather and a season of music and sport looks likely to reset the economy for the summer months, there are huge challenges ahead.”
