“This is largely the result of inflation being back to target, interest rates starting to come down and greater political stability post-election.”

 

Britain’s household saving ratio increased to 10.0 per cent in the second quarter, up from 8.9 per cent in the first three months of the year, and gross domestic product per head rose for a second quarter in a row, albeit more slowly than in the first quarter.

 

Prime Minister Keir Starmer, whose Labour Party won power in July, is seeking to speed up economic growth.

 

Finance minister Rachel Reeves has suggested some taxes will rise in her first budget on Oct. 30, but she has also hinted that she might change fiscal rules on public debt, which could pave the way for more borrowing and help boost investment and economic growth.

 

The Bank of England has forecast growth will slow to 0.3 per cent in the third quarter of 2024 but said there were signs that its first interest rate cut in August and the expectation of more cuts, plus lower inflation, would boost growth later this year.

Compared with the second quarter of 2023, the economy grew by 0.7 per cent, the ONS said, slower than economists’ forecasts of a 0.9 per cent rise.

 

Sterling was little changed against the US dollar after the figures were released.

 

Economic growth in 2023 as a whole was revised up to show a 0.3 per cent expansion, slightly stronger than a previous estimate of a 0.1 per cent increase, reflecting an update to the ONS data.

 

But the economy was still believed to have contracted in the third and fourth quarters of last year, meeting the technical definition of a recession.

 

Separate data published on Monday showed British house prices in September rose by the most since November 2022 in annual terms, up 3.2 per cent compared with the same month last year.

First Published: Sep 30 2024 | 2:09 PM IST