UK economy grows by 0.2% reversing initial contraction estimate

UK economy grows by 0.2% reversing initial contraction estimate

Britain’s economy grew by 0.2% in the three months to June reversing the initial estimate of a 0.1% contraction, official figures show.

The upward revision of the second quarter GDP by the Office for National Statistics implies the UK is not currently in recession, as predicted by the Bank of England earlier this month.

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A technical recession is when the economy sees two consecutive quarters of decline.

ONS chief economist Grant Fitzner said: “These improved figures show the economy grew in the second quarter, revised up from a small fall.

“They also show that, while household savings fell back in the most recent quarter, households saved more than we previously estimated during and after the pandemic.”

The ONS said was driven by upwards improvements for the health and financial sectors.

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The latest data comes in the face of the chaos on the financial markets and fears of rocketing mortgage bills triggered by the government’s tax cutting mini-budget.

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However, while the figures show economic growth in the second quarter it remains below its pre-coronavirus peak, contrary to earlier estimates it had recovered.

The ONS said: “The level of real GDP is now estimated to be 0.2% below where it was pre-coronavirus at quarter 4 2019, downwardly revised from previous estimates of 0.6% above.”