Britain's economy expanded by 0.6% in the second quarter of 2024, according to official data released on Thursday, August 15. This growth rate aligns with economists' predictions, following a robust 0.7% recovery in the first quarter of the year after a mild recession in late 2023.
Earlier this month, the Bank of England revised its annual growth forecast for 2024 to 1.25%, up from 0.5%, reflecting a stronger-than-expected start to the year. The Bank had anticipated a 0.7% growth rate for the second quarter. However, it predicts a slowdown in the latter part of the year, forecasting 0.4% growth in the third quarter and 0.2% in the final quarter, suggesting a return to the economy’s underlying growth rate.
Britain's economic recovery has been gradual since the COVID-19 pandemic, with only Germany experiencing slower growth among the major advanced economies, partly due to high energy costs following Russia's invasion of Ukraine.
Prime Minister Keir Starmer had aimed for an annual growth rate of 2.5% during his campaign leading up to the July 4 election, a target not seen regularly since before the 2008 financial crisis. Finance Minister Rachel Reeves has set a more specific goal for Britain to achieve the fastest per capita GDP growth among the Group of Seven (G7) advanced economies for two consecutive years.
The overall growth in output per hour has decelerated across most advanced economies since the late 2000s, affecting living standards. In Britain, challenges such as low business investment and the economic impacts of Brexit have further contributed to slow growth.
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