UK Economy Records Surprise Growth

The UK economy saw a small growth in the quarter ending June 30, thanks to sharp gains in manufacturing, as well as increased spending by consumers and the government.

On Friday, the Office for National Statistics reported a 0.2% increase in gross domestic product, beating experts who had predicted no growth. This comes after a 0.1% rise in the first quarter.

The growth in manufacturing was helped by a drop in the prices of raw materials. A boost in hospitality activities and government spending on areas like public administration, defense, and health also played a part in keeping the economy on track.

The UK government has made growing the economy one of its five main goals this year, as stated by Prime Minister Rishi Sunak in January, although he did not give a specific target.

Another priority is cutting inflation in half. Annual inflation was at 10.5% in December, dropping to 7.9% in June but still well above the Bank of England's 2% goal.

Previous increases in interest rates could start to have a greater impact on UK economic activity and inflation.

Unlike other major world economies, the UK's economy has not yet recovered to levels seen before the pandemic. Even the Bank of England expects that GDP growth will stay below those levels for a while.

Experts predict that the UK economy won't reach its pre-pandemic level until the third quarter of 2024, marking five years of stalled economic growth.