UK economy grows by 0.6%

The UK's economy grew by 0.6% between April and June as it continued its recovery from the recession at the end of last year. The latest figure  follows a 0.7% increase in the first three months of this year.

Growth was led by the services sector, in particular the IT industry, legal services and scientific research. Services are the biggest contributor to the UK's economy, far greater than manufacturing and construction, both of which saw output fall between April and June.

While gross domestic product (GDP) - a key measure of all the economic activity of companies, governments and people - expanded over the latest quarter, growth was flat in June. While the services sector helped economic expansion over the three months, it was a drag on the performance in June alone.

This week, new inflation data revealed that the rate had increased to 2.2% in the year to July. That is higher than the Bank of England's 2% inflation target. However, inflation in the services sector - which the Bank also looks at when deciding on interest rates - continued to ease. Economists warned that growth might slow in the second half of 2024.

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