UK was G7’s fastest growing economy in first quarter of 2024 according to official figures

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The UK was the fastest growing economy in the G7 in the first quarter of 2024 according to official figures.

The UK’s economy grew faster that the world’s other advanced economies, including Canada, France, Germany, Italy, Japan, the United States and the European Union.

Prime Minister Rishi Sunak hailed the new revised growth and said his party had a “clear plan to deliver a more secure future for your family”.

From January to March 2024, the UK economy expanded by 0.7%, up from the earlier estimate of 0.6%, the Office for National Statistics (ONS) revealed.

GDP growth typically signals higher consumer spending, job creation, increased tax revenues and better pay rises.

The initial estimate was already being reported positively by economists, but the latest revision shows the services sector, covering industries like hairdressing, banking and hospitality, performed exceptionally well becoming a main driver of UK growth.

Thanks to this upward revision, the UK claimed the title of the fastest-growing economy among the G7 countries in the first quarter of this year. The G7 is an informal grouping of seven of the world’s most advanced economies, including Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, as well as the European Union.

The recent growth figures is also a strong indicator showing UK consumer confidence is returning – bolstered by falling inflation and stronger retail sales.

The Prime Minister hailed the new revised growth saying:

“The fastest growth in the G7. Inflation back down to our target – 2%. National Insurance tax cut. We’ve got a clear plan to deliver a more secure future for your family. Don’t surrender the economy to Labour.”

UK inflation fell to 2% in May returning to the official target rate for the first time in nearly three years. Figures released last week also show retail sales have bounced back with 2.9% growth in May.

The improving economy is likely to benefit the incoming Government, with the Bank of England widely expected to cut interest rates later this year.

The Bank of England, which sets interest rates, has opened the door to cutting them in August in what would be the first drop in borrowing costs for more than four years since before the Pandemic.

Paul Dales, the chief UK economist at the research company Capital Economics said:

“It now looks as though real household disposable income will grow by more than our forecast of 2.0% this year and we are expecting a solid 3.5% gain next year too.

“This is certainly good news for whoever will be the prime minister this time next week, although it could also contribute to the Bank of England cutting interest rates a bit slower than otherwise.”

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