After slipping into recession at the close of 2023, Britain's economy has now grown for two consecutive quarters, posting 0.6 percent expansion between April and June of 2024 — a figure that met expectations without exceeding them. The recovery, led by technology, scientific research, and legal services, arrives as a new Labour government stakes its political identity on reversing years of stagnation. Whether this momentum represents a durable turning point or a temporary reprieve remains the defining question for the months ahead.
UK economy expands 0.6% in Q2, signaling sustained recovery from recession
The economy grew strongly for two quarters after late-2023 weakness
Mark
So the UK economy grew 0.6 percent in the second quarter. Is that actually good?
Mimi
It's solid. It matched what economists expected, and it came right after a 0.7 percent jump in the first quarter. After the country fell into recession at the end of 2023, two consecutive quarters of growth is the kind of signal the new government wanted to see.
Luke
But June was flat, right? The monthly data showed no growth at all in June, and the service sector actually shrank that month.
Mimi
True. That's why some economists are warning the pace might not hold. The first half of 2024 was stronger than trend, and that's hard to sustain.
Mark
What's driving the growth that is happening?
Mimi
Mostly services—technology, scientific research, legal services. Those sectors expanded enough to offset problems in retail and the ongoing fallout from the US actors' strikes, which are still affecting UK film and TV production.
Luke
So it's not broad-based growth. It's concentrated in a few sectors while others are struggling.
Mimi
Right. And that matters for what comes next. If growth depends on a narrow set of industries, there's less cushion if something goes wrong.
Mark
The new Labour government is betting on this recovery, aren't they?
Mimi
They've made growth their central promise. The Treasury chief said they're reversing 14 years of economic instability. Two quarters of growth helps that narrative, but they need it to continue.
Luke
And the data doesn't guarantee it will. The flatness in June is a real caution flag.
Mark
So we're watching to see if this holds.
Mimi
Exactly. The recovery is real, but whether it becomes the sustained growth the government is promising—that's still an open question.
The Pulse
- A brief but sharp recession in late 2023 — when GDP fell 0.3 percent and every major economic sector contracted at once — set the stage for an anxious recovery.
- Two consecutive quarters of solid growth have given the incoming Labour government early evidence that its mandate to end economic stagnation is not purely aspirational.
- Technology, scientific research, and legal services are carrying the expansion, but retail weakness and the long shadow of the 2023 Hollywood strikes on British film production reveal that the recovery is uneven.
- June's flat monthly growth and a 0.1 percent contraction in services that same month have introduced doubt about whether the first half's momentum can hold.
- Economists are divided — some see deceleration ahead, while others, like EY's chief economist, expect continued decent growth, even if above-trend rates prove difficult to sustain.
After slipping into recession at the close of 2023, Britain's economy has now grown for two consecutive quarters, posting 0.6 percent expansion between April and June of 2024 — a figure that met expectations without exceeding them. The recovery, led by technology, scientific research, and legal services, arrives as a new Labour government stakes its political identity on reversing years of stagnation. Whether this momentum represents a durable turning point or a temporary reprieve remains the defining question for the months ahead.
Britain's economy grew 0.6 percent in the second quarter of 2024, official figures confirmed on Thursday, extending a recovery that began after the country fell into recession in the final months of 2023. The result matched economist forecasts and followed 0.7 percent growth in the first quarter, suggesting the rebound was holding its shape, if not gathering speed.
The figures arrived as a modest early dividend for the new Labour government, which entered office promising to undo what Treasury chief Rachel Reeves described as fourteen years of economic chaos under the Conservatives. Growth stimulation sits at the centre of Labour's agenda, and the second-quarter data offered at least preliminary evidence that the economy was moving in the right direction.
The service sector drove the expansion, with technology, scientific research, and legal services all contributing positively. Retail, however, contracted, and the television and film industry continued to feel the aftershocks of the 2023 Screen Actors Guild strikes in the United States, which disrupted British production schedules well into 2024. The Office for National Statistics noted that the economy had now grown strongly for two quarters after a period in which all three major sectors — services, industry, and construction — had contracted simultaneously.
Yet the data carried a cautionary undertone. June's monthly figures showed no growth at all, with services actually shrinking by 0.1 percent that month. Some economists read this as a warning that the pace could slow. Others, including EY UK's chief economist Peter Arnold, took a more measured view, expecting continued growth at a decent pace while acknowledging that the above-trend rates of early 2024 would be difficult to maintain. The recovery, in short, is real — but whether it can move fast enough to meet the government's ambitions remains an open question.
Britain's economy expanded by 0.6 percent in the second quarter of 2024, official statistics released Thursday confirmed, marking the continuation of a recovery that began earlier in the year after the country slipped into recession late in 2023. The growth rate matched what economists had anticipated and followed a stronger 0.7 percent increase in the first quarter, suggesting the momentum was holding even if not accelerating.
The expansion came as welcome news for the Labour government, which took office with an explicit mandate to reverse what it characterized as years of economic stagnation. Treasury chief Rachel Reeves had pledged in recent weeks to make growth stimulation a priority, framing the task as undoing what she called "14 years of chaos and economic instability" under the previous Conservative administrations. The second-quarter figures provided at least initial evidence that the economy was moving in the intended direction.
The growth was driven primarily by the service sector, which encompasses much of Britain's economic engine. Within that broad category, technology, scientific research, and legal services all expanded, offsetting weakness elsewhere in the economy. Retail activity contracted, and the television and film production industry continued to struggle—a lingering effect of the 2023 strikes by the Screen Actors Guild in the United States, which disrupted production schedules in Britain as well. Liz McKeown, director of economic statistics at the Office for National Statistics, noted that the economy had now "grown strongly for two quarters" after the weakness that characterized the final months of 2023, when all three major economic sectors—services, industrial production, and construction—had contracted simultaneously.
The recession that prompted this recovery had been sharp if brief. In the final three months of 2023, GDP had contracted by 0.3 percent, a decline that touched every corner of the economy. The subsequent rebound across the first half of 2024 represented a genuine shift, though the data contained hints that the pace might not be sustainable. June's monthly figures showed flat growth, with the service sector itself contracting by 0.1 percent that month alone. The question hanging over the recovery was whether the momentum would persist or whether the economy would settle into a slower rhythm.
Economists split on the outlook. Some cautioned that growth could decelerate in the months ahead, pointing to the flatness of June as a warning sign. Others, including Peter Arnold, chief economist at Ernst and Young U.K., took a more measured optimistic view. Arnold suggested the economy would "continue growing at a decent pace" but acknowledged it would likely struggle to maintain the above-trend rates that had characterized the first half of the year. The recovery was real, in other words, but the question of whether it could be sustained at a pace sufficient to meet the government's ambitions remained open.
Notable Quotes
The U.K. economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year— Liz McKeown, director of economic statistics at the Office for National Statistics
EY expects the economy to continue growing at a decent pace, though it will struggle to sustain the above-trend rates seen in the first half of 2024— Peter Arnold, chief economist at Ernst and Young U.K.
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