The UK economy experienced a notable upward revision in growth figures for 2023, now showing an expansion of 0.3%, a significant increase from the earlier 0.1% estimate.
- The improved figures are attributed to detailed data on wages and profits, while challenges persist as the UK remains one of the slowest-growing G7 economies.
- A modest recovery forecast by the OECD places the UK economy growth at 1.1% for 2024, indicating gradual improvement.
- Despite better economic indicators, the revised GDP growth for Q2 of 2024 decreased slightly to 0.5%, highlighting the economic challenges.
- Other economic indicators such as real GDP per head, disposable incomes, and the household savings ratio showed mixed results but pointed towards a broader recovery.
The revised data from the Office for National Statistics (ONS) illustrates a growth of 0.3% for the UK economy in 2023, an improvement from the previously reported 0.1% growth rate. This adjustment follows the integration of comprehensive data concerning wages and corporate profits.
Despite this positive revision, the UK economy continues to rank among the slowest-growing within the G7, overshadowing only Germany, which contracted by 0.1% during the same period. The report fuels criticism towards the Labour government, which has been accused of inheriting a challenging economic environment from the previous administration.
The Organisation for Economic Co-operation and Development (OECD) projects a 1.1% growth for the UK economy in 2024, demonstrating modest signs of recovery. This forecast comes amidst low inflation rates, declining interest rates, and enhanced political stability post-general election.
The ONS also adjusted the second quarter GDP growth for 2024 to 0.5%, down from an earlier 0.6%, underscoring ongoing economic hurdles faced by the UK as Sir Keir Starmer assumed office. Economist Gora Suri noted that while this indicates a slight decrease, the overall economic outlook remains improved.
Other economic indicators presented a mixed but cautiously optimistic picture. Real GDP per head rose by 0.2% in Q2 of 2024, though it still lags by 0.3% compared to the previous year. Disposable incomes increased by 1.3% during the same period, albeit a slower pace than the preceding quarter’s 1.6% rise. Meanwhile, the household savings ratio climbed significantly to 10% from 8.9% in Q1 of 2024.
According to Liz McKeown, Director of Economic Statistics at the ONS, these revised GDP figures incorporate new data sources, including annual surveys and VAT returns. However, these revisions have not drastically altered the last 18 months’ growth trajectory. The ONS has historically faced scrutiny over underestimating the UK’s post-Covid recovery strength, and questions about labor market data reliability continue due to declining survey response rates.
The revised economic data for the UK shows improvement, although challenges persist in ensuring sustained growth.
