UK economy continues to outperform France, Germany and Italy

The British economy posted a 0.6% growth in the three months to June, aligning with economists’ expectations and following a 0.7% increase in the first quarter, according to the Office for National Statistics (ONS) data released this week.

This steady performance places the UK ahead of its major advanced economy counterparts, achieving a 1.3% expansion in the first half of 2024.

By comparison, the US economy grew by 1.1%, while France lagged with a modest 0.6% increase over the same period.

Germany, traditionally Europe’s economic powerhouse, has faltered, registering a mere 0.1% growth this year. Italy and Canada, meanwhile, reported growth rates of 0.5% and 0.9% respectively.

Despite the positive figures for the UK, Labour’s Chancellor Rachel Reeves has signalled that tax increases could be on the horizon in her upcoming Budget on October 30, as questions persist regarding how Labour intends to fund the 15% pay rise for train drivers announced this week.

Shadow Chancellor Jeremy Hunt described the UK’s economic performance as “further proof that Labour has inherited a growing and resilient economy.”

Mr Hunt added: “The Chancellor’s attempt to blame her economic inheritance for her decision to raise taxes – tax rises she had always planned – will not wash with the public.”

Germany’s economy, the largest in Europe, contracted by 0.1% in the three months to June, while France’s economy grew by 0.3% and Italy’s by 0.2%. The broader EU reported a 0.3% growth rate.

Liz McKeown, director of economic statistics at the ONS, highlighted that the UK’s growth was primarily driven by Britain’s robust services sector, with significant contributions from law firms, IT businesses and scientific research.