The UK economy grew faster than expected in the first quarter of this year, with GDP expanding by 0.7% compared to the previous estimate of 0.6%. This growth confirms that the UK was the fastest growing G7 economy in the first quarter of 2024. The Office for National Statistics released updated GDP data showing that the services sector expanded by 0.8%, while production grew by 0.6% and the construction sector shrank by 0.6% due to bad weather.
The newly released data also revealed an increase in household savings ratio to 11.1% in the first quarter of 2024, up from 10.2% in the previous quarter. Real household disposable income (RHDI) saw a 0.7% growth in the first quarter, driven by an increase in wages and salaries and a decrease in actual social contributions paid by employees.
Business investment, however, was weaker than initially estimated, with growth at 0.5% in the first quarter, down from the previous estimate of 0.9%. Despite this setback, GDP per head saw an increase of 0.5%, up from the earlier estimate of 0.4%, marking a positive trend in living standards for the population.
While the UK led the G7 pack in quarter-on-quarter growth in the first quarter of 2024, it has experienced slower growth since the pandemic compared to some counterparts. The UK’s economic growth since the end of 2019 stands at 1.8%, trailing behind the US, Canada, Italy, France, and Japan. Nonetheless, the positive GDP data provides optimism for the UK economy as it emerges from a brief recession and heads into a new quarter amidst upcoming general elections.
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