UK Q2 GDP 0.2% 'Surprise' Growth... Will It Avoid Recession?

June GDP Up 0.5% Month-on-Month

The UK economy grew by 0.2% in the second quarter of this year, supported by household consumption and manufacturing output.

According to Bloomberg and others on the 11th (local time), the UK Office for National Statistics (ONS) announced that the GDP growth rate for the second quarter increased by 0.2% compared to the previous quarter and by 0.4% year-on-year. The UK GDP rose by 0.5% in June compared to the previous month, more than double the market forecast of 0.2%, driving the overall growth rate for the second quarter.

Previously, the market had expected growth to stagnate within 0.1% in the second quarter following 0.1% growth in the first quarter of this year.

The ONS explained, "Manufacturing output increased by 1.6%, other production sectors by 0.7%, and services by 0.1%," adding, "The increase in production in June, along with the additional public holidays in May due to the coronation of King Charles III, had a positive impact."

According to CNBC, UK Chancellor of the Exchequer Jeremy Hunt issued a statement on the day, saying, "The Bank of England currently predicts that we will avoid a recession," and "If we continue plans to promote job creation and business investment, the International Monetary Fund (IMF) expects us to grow faster than Germany, France, and Italy in the long term."

However, the growth rate remains low compared to advanced economies such as the G7. Ruth Gregory, Senior Economist at Capital Economics, said, "The effects of interest rate hikes will appear with a lag, and the UK economy is expected to experience a mild recession in the second half of the year."

Jeremy Hunt, UK Chancellor of the Exchequer.
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