UK economy grew faster than thought in first quarter of 2024 – business live

From 35m ago

Introduction: UK grew faster than thought in Q1

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The UK economy grew faster than previously thought at the start of this year, as it emerged from last year’s short recession.

Newly updated GDP data, just released, shows that the economy grew by 0.7% in January-March.

That’s up from a previous estimate of 0.6%, and confirms that the UK was the fastest growing G7 economy in the first quarter of this year. That could bolster Rishi Sunak’s argument that the economy is turning a corner, ahead of next week’s general election.

The Office for National Statistics released this encouraging news in the UK’s latest GDP quarterly national accounts, for January to March 2024.

They show that the UK’s services sector expanded by 0.8% in the quarter, up from a previous estimate of 0.7% growth.

Production, though, is now estimated to have grown by 0.6%, revised down from a 0.8% increase.

The construction sector shrank by 0.6%, as builders were hit by bad weather this year.

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GDP is estimated to have grown by 0.7% in Quarter 1 (Jan to Mar) 2024, revised up from a first estimate of 0.6%.

Read more ➡️ https://t.co/kMa7MTxKxV pic.twitter.com/ISkPD2lZEf

&mdash; Office for National Statistics (ONS) (@ONS) June 28, 2024

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The ONS reports:

  • In expenditure terms, there were increases in the volume of net trade and household spending, partially offset by falls in gross capital formation and government consumption.

  • The household saving ratio is estimated to be 11.1% in the latest quarter, up from 10.2% in Quarter 4 (Oct to Dec) 2023.

  • Real households’ disposable income (RHDI) is estimated to have grown by 0.7% in Quarter 1 2024, maintaining the same growth as the previous quarter.

Today’s GDP report also confirms that the economy shrank in the second half of last year – contracting by 0.1% in quarter 3, and 0.3% in quarter 4 – a technical recession.

The agenda

  • 7am BST: UK national accounts for Q1 2024

  • 7am BST: German retail sales for May

  • 7.45am BST: French inflation rate for June

  • 8.55am BST: German unemployment report for June

  • 10am BST: Italian inflation rate for June

  • 1.30pm BST: US PCE inflation index for May

  • 3pm BST: University of Michigan’s consumer sentiment index for June

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UK real households’ disposable income (RHDI) is estimated to have grown by 0.7% in the first quarter of this year, matching the growth in Q4 2023.

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This is a measure of how much income a household is left with, after tax, once you’ve adjusted for inflation.

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The ONS reports that wages rose in the last quarter, but so did the tax take…..

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Within RHDI, nominal gross disposable income saw growth at 1.1%, because of an increase in compensation of employees of £4.3 billion. This was itself driven by an increase in wages and salaries of £3.0 billion and a decrease in households’ actual social contributions paid by employees of £3.4 billion, which was driven by the reduction of the employees’ National Insurance contribution rate.

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This was offset by a rise in taxes on income and wealth of £3.6 billion, which was driven by an increase in taxes on self-employment of £3.1 billion and an increase in the implied deflator of 0.4%.

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Interestingly, the UK’s household savings ratio has risen – showing that people have more excess cash than at the end of last year.

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The household saving ratio is estimated at 11.1% in the January-March quarter, up from 10.2% in October-December.

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This ratio measures the average percentage of disposable income that is saved.

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The ONS says this is driven by an increase in pensions, in income from wages and salaries, and by the cut in national insurance rates at the start of the year.

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The household saving ratio is estimated to be 11.1% in Quarter 1 (Jan to Mar 2024), up from 10.2% in Quarter 4 (Oct to Dec) 2023. pic.twitter.com/2PL1KBE9i6

&mdash; Office for National Statistics (ONS) (@ONS) June 28, 2024

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FYI, the UK economy is now estimated to have grown by 0.7% in Q1 (0.5% for GDP per head), revised up from 0.6%.

And the household saving ratio was 11.1%, up from 10.2% in Q4 23, showing there is still room for a much stronger recovery in consumer spending than most expect… 🤓 pic.twitter.com/G4BzKYy8PT

&mdash; Julian Jessop FRSA (@julianHjessop) June 28, 2024

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GDP per capita is a better measure of economic performance, as it measures how much the economy grew for each member of the population.

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And there’s good news here too, finally.

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Real GDP per head is estimated to have increased by 0.5% in the first quarter of 2024, up from a previous estimate of 0.4% growth.

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That follows seven consecutive quarters without positive growth.

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And on an annual basis, real GDP per capita – basically a measure of living standards – is estimated to be 0.6% lower compared with the same quarter a year ago.

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NEW@ons just revised up its estimate of UK economic growth in the first quarter of this year from 0.6% to 0.7%. And GDP per head up 0.5% (previous estimate was 0.4%).
These were already good figures. Now they're a little better. https://t.co/q3TKQAKrsS

&mdash; Ed Conway (@EdConwaySky) June 28, 2024

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This table, from today’s national accounts, shows how the UK was the fastest-growing G7 member in Q1….

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….but lags behind many rivals when you look at growth since the pandemic.

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GDP for Q1 2024","caption":"UK GDP for Q1 2024","credit":"Photograph: ONS"}},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

As you can see, the UK (+0.7%) posted the fastest quarter-on-quarter growth in Q1, ahead of Canada (+0.4%), Italy and the US (both +0.3%), France and Germany (both +0.2%) and Japan (which shrank by 0.5%).

","elementId":"5827de84-f531-4096-a54e-b5ab58bb9e3a"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

But since the end of 2019, the UK has grown by 1.8%, slower than the US, Canada, Italy, France and Japan, but better than Germany which has barely grown since.

","elementId":"3f1a7872-f6dd-4e4e-a451-feb09e60da0a"}],"attributes":{"pinned":false,"keyEvent":true,"summary":false},"blockCreatedOn":1719555794000,"blockCreatedOnDisplay":"07.23 BST","blockLastUpdated":1719556334000,"blockLastUpdatedDisplay":"07.32 BST","blockFirstPublished":1719556334000,"blockFirstPublishedDisplay":"07.32 BST","blockFirstPublishedDisplayNoTimezone":"07.32","title":"Table: UK leads G7 pack in last quarter (but not since pandemic)","contributors":[],"primaryDateLine":"Fri 28 Jun 2024 07.55 BST","secondaryDateLine":"First published on Fri 28 Jun 2024 07.23 BST"},{"id":"667e46998f086bfb3f8efd26","elements":[{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

","elementId":"cba63898-d47a-4fb0-be57-03ffd2d4fe09"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

The UK economy grew faster than previously thought at the start of this year, as it emerged from last year’s short recession.

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Newly updated GDP data, just released, shows that the economy grew by 0.7% in January-March.

","elementId":"750070ff-ddf5-4d30-a39c-60a29652a747"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

That’s up from a previous estimate of 0.6%, and confirms that the UK was the fastest growing G7 economy in the first quarter of this year. That could bolster Rishi Sunak’s argument that the economy is turning a corner, ahead of next week’s general election.

","elementId":"d1689c2e-ff08-4598-8911-c4bb065622c5"},{"_type":"model.dotcomrendering.pageElements.RichLinkBlockElement","prefix":"Related: ","text":"Labour and Lib Dem tactical voting plans will have big impact on Tory seats","elementId":"d47fd913-0f25-48a2-867a-dfb223fbd66d","role":"thumbnail","url":"https://www.theguardian.com/politics/article/2024/jun/27/labour-lib-dem-tactical-voting-plans-impact-tory-seats"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

The Office for National Statistics released this encouraging news in the UK’s latest GDP quarterly national accounts, for January to March 2024.

","elementId":"7d440a6b-eab2-4788-90a0-5d7f633b141c"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

They show that the UK’s services sector expanded by 0.8% in the quarter, up from a previous estimate of 0.7% growth.

","elementId":"edb35132-225c-49b2-a270-2c9df39f7b56"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

Production, though, is now estimated to have grown by 0.6%, revised down from a 0.8% increase.

","elementId":"f17aefd3-c159-47f3-a9a0-69945aab06ae"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

The construction sector shrank by 0.6%, as builders were hit by bad weather this year.

","elementId":"0231685b-a9be-4751-b612-fc8fa4e24fe5"},{"_type":"model.dotcomrendering.pageElements.TweetBlockElement","source":"Twitter","id":"1806568221895483728","elementId":"3931a711-f6ad-4e10-8932-74eb452c37e8","hasMedia":false,"role":"inline","url":"https://x.com/ONS/status/1806568221895483728","isThirdPartyTracking":false,"html":"

GDP is estimated to have grown by 0.7% in Quarter 1 (Jan to Mar) 2024, revised up from a first estimate of 0.6%.

Read more ➡️ https://t.co/kMa7MTxKxV pic.twitter.com/ISkPD2lZEf

&mdash; Office for National Statistics (ONS) (@ONS) June 28, 2024

"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

The ONS reports:

","elementId":"54f93cea-f2ef-4ec2-b749-e12fa3842a0a"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

    \n

  • In expenditure terms, there were increases in the volume of net trade and household spending, partially offset by falls in gross capital formation and government consumption.

  • \n

  • The household saving ratio is estimated to be 11.1% in the latest quarter, up from 10.2% in Quarter 4 (Oct to Dec) 2023.

  • \n

  • Real households’ disposable income (RHDI) is estimated to have grown by 0.7% in Quarter 1 2024, maintaining the same growth as the previous quarter.

  • \n

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Today’s GDP report also confirms that the economy shrank in the second half of last year – contracting by 0.1% in quarter 3, and 0.3% in quarter 4 – a technical recession.

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The agenda

","elementId":"f0bca122-4c3a-4691-a46b-c2664cb7d0a2"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

    \n

  • 7am BST: UK national accounts for Q1 2024

  • \n

  • 7am BST: German retail sales for May

  • \n

  • 7.45am BST: French inflation rate for June

  • \n

  • 8.55am BST: German unemployment report for June

  • \n

  • 10am BST: Italian inflation rate for June

  • \n

  • 1.30pm BST: US PCE inflation index for May

  • \n

  • 3pm BST: University of Michigan’s consumer sentiment index for June

  • \n

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Key events

Filters BETA

Real households’ disposable income grows by 0.7%, again

UK real households’ disposable income (RHDI) is estimated to have grown by 0.7% in the first quarter of this year, matching the growth in Q4 2023.

This is a measure of how much income a household is left with, after tax, once you’ve adjusted for inflation.

The ONS reports that wages rose in the last quarter, but so did the tax take…..

Within RHDI, nominal gross disposable income saw growth at 1.1%, because of an increase in compensation of employees of £4.3 billion. This was itself driven by an increase in wages and salaries of £3.0 billion and a decrease in households’ actual social contributions paid by employees of £3.4 billion, which was driven by the reduction of the employees’ National Insurance contribution rate.

This was offset by a rise in taxes on income and wealth of £3.6 billion, which was driven by an increase in taxes on self-employment of £3.1 billion and an increase in the implied deflator of 0.4%.

Household savings ratio rises

Interestingly, the UK’s household savings ratio has risen – showing that people have more excess cash than at the end of last year.

The household saving ratio is estimated at 11.1% in the January-March quarter, up from 10.2% in October-December.

This ratio measures the average percentage of disposable income that is saved.

The ONS says this is driven by an increase in pensions, in income from wages and salaries, and by the cut in national insurance rates at the start of the year.

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The household saving ratio is estimated to be 11.1% in Quarter 1 (Jan to Mar 2024), up from 10.2% in Quarter 4 (Oct to Dec) 2023. pic.twitter.com/2PL1KBE9i6

&mdash; Office for National Statistics (ONS) (@ONS) June 28, 2024

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The household saving ratio is estimated to be 11.1% in Quarter 1 (Jan to Mar 2024), up from 10.2% in Quarter 4 (Oct to Dec) 2023. pic.twitter.com/2PL1KBE9i6

— Office for National Statistics (ONS) (@ONS) June 28, 2024

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FYI, the UK economy is now estimated to have grown by 0.7% in Q1 (0.5% for GDP per head), revised up from 0.6%.

And the household saving ratio was 11.1%, up from 10.2% in Q4 23, showing there is still room for a much stronger recovery in consumer spending than most expect… 🤓 pic.twitter.com/G4BzKYy8PT

&mdash; Julian Jessop FRSA (@julianHjessop) June 28, 2024

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FYI, the UK economy is now estimated to have grown by 0.7% in Q1 (0.5% for GDP per head), revised up from 0.6%.

And the household saving ratio was 11.1%, up from 10.2% in Q4 23, showing there is still room for a much stronger recovery in consumer spending than most expect… 🤓 pic.twitter.com/G4BzKYy8PT

— Julian Jessop FRSA (@julianHjessop) June 28, 2024

UK GDP per head revised higher

GDP per capita is a better measure of economic performance, as it measures how much the economy grew for each member of the population.

And there’s good news here too, finally.

Real GDP per head is estimated to have increased by 0.5% in the first quarter of 2024, up from a previous estimate of 0.4% growth.

That follows seven consecutive quarters without positive growth.

And on an annual basis, real GDP per capita – basically a measure of living standards – is estimated to be 0.6% lower compared with the same quarter a year ago.

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NEW@ons just revised up its estimate of UK economic growth in the first quarter of this year from 0.6% to 0.7%. And GDP per head up 0.5% (previous estimate was 0.4%).
These were already good figures. Now they're a little better. https://t.co/q3TKQAKrsS

&mdash; Ed Conway (@EdConwaySky) June 28, 2024

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NEW@ons just revised up its estimate of UK economic growth in the first quarter of this year from 0.6% to 0.7%. And GDP per head up 0.5% (previous estimate was 0.4%).
These were already good figures. Now they’re a little better. https://t.co/q3TKQAKrsS

— Ed Conway (@EdConwaySky) June 28, 2024

Table: UK leads G7 pack in last quarter (but not since pandemic)

This table, from today’s national accounts, shows how the UK was the fastest-growing G7 member in Q1….

….but lags behind many rivals when you look at growth since the pandemic.

UK GDP for Q1 2024 Photograph: ONS

As you can see, the UK (+0.7%) posted the fastest quarter-on-quarter growth in Q1, ahead of Canada (+0.4%), Italy and the US (both +0.3%), France and Germany (both +0.2%) and Japan (which shrank by 0.5%).

But since the end of 2019, the UK has grown by 1.8%, slower than the US, Canada, Italy, France and Japan, but better than Germany which has barely grown since.

Introduction: UK grew faster than thought in Q1

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The UK economy grew faster than previously thought at the start of this year, as it emerged from last year’s short recession.

Newly updated GDP data, just released, shows that the economy grew by 0.7% in January-March.

That’s up from a previous estimate of 0.6%, and confirms that the UK was the fastest growing G7 economy in the first quarter of this year. That could bolster Rishi Sunak’s argument that the economy is turning a corner, ahead of next week’s general election.

The Office for National Statistics released this encouraging news in the UK’s latest GDP quarterly national accounts, for January to March 2024.

They show that the UK’s services sector expanded by 0.8% in the quarter, up from a previous estimate of 0.7% growth.

Production, though, is now estimated to have grown by 0.6%, revised down from a 0.8% increase.

The construction sector shrank by 0.6%, as builders were hit by bad weather this year.

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GDP is estimated to have grown by 0.7% in Quarter 1 (Jan to Mar) 2024, revised up from a first estimate of 0.6%.

Read more ➡️ https://t.co/kMa7MTxKxV pic.twitter.com/ISkPD2lZEf

&mdash; Office for National Statistics (ONS) (@ONS) June 28, 2024

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The ONS reports:

  • In expenditure terms, there were increases in the volume of net trade and household spending, partially offset by falls in gross capital formation and government consumption.

  • The household saving ratio is estimated to be 11.1% in the latest quarter, up from 10.2% in Quarter 4 (Oct to Dec) 2023.

  • Real households’ disposable income (RHDI) is estimated to have grown by 0.7% in Quarter 1 2024, maintaining the same growth as the previous quarter.

Today’s GDP report also confirms that the economy shrank in the second half of last year – contracting by 0.1% in quarter 3, and 0.3% in quarter 4 – a technical recession.

The agenda

  • 7am BST: UK national accounts for Q1 2024

  • 7am BST: German retail sales for May

  • 7.45am BST: French inflation rate for June

  • 8.55am BST: German unemployment report for June

  • 10am BST: Italian inflation rate for June

  • 1.30pm BST: US PCE inflation index for May

  • 3pm BST: University of Michigan’s consumer sentiment index for June

The Guardian