Rishi Sunak has claimed the Government’s plan was working, after this morning’s GDP figures showed the UK economy grew by 0.2% in the second quarter of the year.
Sunak said: “This is good news. At the beginning of the year I made growing the economy one of my top priorities, and we are making progress.
“There’s still more work to do, but today’s figures show the plan is working.”
Tomasz Wieladek, chief European economist at investment management firm T. Rowe Price, said that today’s GDP data bolsters the prospects of further increases in interest rates.
Wieladek says: “UK June GDP data surprised to the upside this morning growing by a punchy 0.5% relative to expectations of 0.2%. There was a large upside surprise in Manufacturing growth, growing by a very large 2.4% on the month, relative to expectations of 0.2% growth.
“Construction output, a category that is normally interest rate sensitive, rose by 1.6% against expectations of no growth. Services grew by 0.2% in June, in line with expectations.
“Nevertheless, it is striking that the most interest sensitive categories, manufacturing and construction, saw such a large rebound in June. This suggests that the rate hikes this year are not yet fully weighting on growth data as expected.”