UK economy grew faster than thought in first quarter of 2024 – business live | Business

GDP per capita is a better measure of economic performance because it measures how much the economy has grown for each member of the population.

And here is finally some good news.

Real GDP per capita is expected to have increased by 0.5% in the first quarter of 2024, up from a previous estimate of 0.4% growth.

This follows seven consecutive quarters without positive growth.

And on an annualized basis, real GDP per capita – basically a measure of living standards – is estimated to be 0.6% lower than in the same quarter a year ago.

This table, from today’s National Accounts, shows how the UK was the fastest growing member of the G7 in Q1….

….but lags behind many competitors when you look at post-pandemic growth.

As you can see, Great Britain (+0.7%) posted the fastest quarterly growth in Q1, before Canada (+0.4%), Italy and on US (both +0.3%), France and Germany (both +0.2%) and Japan (which shrinks by 0.5%).

But since the end of 2019, the UK has grown by 1.8%, slower than the US, Canada, Italy, France and Japan, but better than Germany, which has barely grown since then.

Good morning and welcome to our ongoing coverage of business, financial markets and the global economy.

The UK economy grew faster than expected at the start of this year after emerging from last year’s recession.

The updated GDP figures just released showed that the economy grew by 0.7% in January-March.

This is up from a previous estimate of 0.6% and confirms that the UK was the fastest growing G7 economy in the first quarter of this year. This may support Rishi Sunak’s argument that the economy is turning around ahead of next week’s general election.

The Office for National Statistics published this encouraging news in the latest UK release GDP quarterly national accounts, for January to March 2024

They show that the UK services sector expanded by 0.8% in the quarter, up from a previous estimate of 0.7% growth.

However, manufacturing is now estimated at 0.6% growth, revised down from a 0.8% increase.

The construction sector shrank 0.6% as builders were hit by bad weather this year.

The ONS reports:

• On the expenditure side, there were increases in the volume of net trade and household spending, partially offset by declines in gross capital formation and government consumption.

• The household savings rate is estimated at 11.1% in the last quarter, up from 10.2% in the fourth quarter (October to December) of 2023.

• Real household disposable income (RHDI) is estimated to have grown by 0.7% in the first quarter of 2024, maintaining the same growth as the previous quarter.

Today’s GDP report also confirms that the economy shrank in the second half of last year – contracting 0.1% in the 3rd quarter and 0.3% in the 4th quarter – a technical recession.

The agenda

• 7am BST: UK National Accounts for Q1 2024

• 7am BST: German retail sales for May

• 7.45am BST: French inflation rate for June

• 8.55am BST: German unemployment report for June

• 10am BST: Italy Inflation for June

• 13.30 BST: US PCE Inflation Index for May

• 15:00 BST: University of Michigan Consumer Sentiment Index for June