UK economy grows by 0.2% as beverages and hospitality grow

Monday, August 14, 2023

The sluggish UK economy hardly got going in the second quarter of the year, with growth of only 0.2 per cent in the three months to June

Sluggish GDP growth means there is no immediate recession risk - defined as two successive quarters of shrinking output - but the United Kingdom is stuck in a growth trap.

Gross domestic product (GDP) grew by 0.5% in June alone, counterbalanced by the additional May Bank Holiday for the coronation of the king.

Since then, growth has been 0.1 per cent for consecutive quarters, down 0.1 per cent, followed by two further quarters of 0.1 per cent and now 0.2 per cent.

The biggest contributor was food and drinks services, which grew 1.4%, with "anecdotal evidence" from ONS monthly business survey indicating good weather and an increase in live demonstrations boosted business sales in june, putting good pressure on the beverages

industry.

Growth stood at 0.2% in April.

Commenting on the most recent data, the Chancellor of the Exchequer, Jeremy Hunt, said: "The actions we're taking to fight inflation are starting to take effect, which means we're laying the strong foundations needed to grow the economy.

Mr Hunt said he would back the Bank of England's policy of ratcheting up the cost of money to subsume inflation, even though it could trigger a recession over the winter.