UK economic growth slows but beats forecasts

UK economic growth slowed between April and June, according to official figures, but was better than expected.

The economy expanded by 0.3%, down from 0.7% in the first three months of the year, the Office for National Statistics said.

The biggest contribution came from services while the construction industry also grew.

The UK government has made boosting economic growth a key priority and the latest data beat forecasts of 0.1% expansion.

Chancellor Rachel Reeves said the figures were “positive” for an economy that “has felt stuck for too long”.

But she added: “There is more to do to deliver an economy that works for working people.”

However, Conservative shadow chancellor Mel Stride accused her of “economic vandalism” while Liberal Democrat MP Daisy Cooper said: “Snails would scoff at the pace that our economy is growing.

“The Conservative Party led us into this economic quagmire but this Labour government has failed to break from the years of mismanagement.”

The economy performed better than expected in June, according to ONS figures, while previous estimates for April were revised upwards.

The ONS had initially said that gross domestic product (GDP) – a key measure of economic activity – had shrunk by 0.3% in April but now said it contracted by 0.1%.

But Ruth Gregory, deputy chief UK economist at Capital Economics, said it was doubtful the country “will maintain this pace of growth” between July and September.

“The weak global economy will remain a drag on UK GDP growth for a while yet,” she said.

“The full drag on business investment from April’s tax rises has yet to be felt. And the ongoing speculation about further tax rises in the Autumn Budget will probably keep consumers in a cautious mood.”