UK economy grows faster than expected after surprisingly strong June | Economic growth (GDP)

The UK economy grew faster than expected in the second quarter of this year after growth was boosted by a recovery in car manufacturing and a surprisingly strong June.

UK GDP increased by 0.2% between April and June, up from 0.1% in the previous three months and the best quarterly reading in more than a year, according to the Office for National Statistics (ONS).

The figures surprised economists, with a poll of them beforehand forecasting no growth in output during the quarter.

The surprisingly fast growth was helped by an unexpectedly strong performance in June, when output rose by 0.5%. GDP had fallen by 0.1% in May after growth of 0.2% in April.

Darren Morgan, an ONS director of economic statistics, said: “The economy bounced back from the effects of May’s extra bank holiday to record strong growth in June. Manufacturing saw a particularly strong month, with both cars and the often-erratic pharmaceutical industry seeing particularly buoyant growth.

“Services also had a strong month, with publishing and car sales and legal services all doing well, though this was partially offset by falls in health, which was hit by further strike action.

“Construction also grew strongly, as did pubs and restaurants, with both aided by the hot weather.”

The increase in manufacturing output in the latest quarter was mainly driven by an increase of 1.6% in manufacturing, the ONS said.

The largest positive contribution was from making transport equipment, after the Society of Motor Manufacturers and Traders reported a 16.2% increase in car manufacturing in June 2023 compared with the same month a year ago.

Carmakers endured a torrid coronavirus pandemic, as shortages of computer chips meant they were unable to produce enough cars to meet soaring demand. However, during 2023 the chip shortage has eased, allowing production to recover. UK-based manufacturers such as JLR, the maker of the Jaguar and Land Rover brands, are now working through big backlogs of orders.